Chicago-based nuclear-power giant Exelon and Pepco Holdings said Monday they will push for a merger despite a ruling last week by regulators in the nation’s capital that blocked the proposed $6.9 billion deal.
In a sign that they plan to appeal the ruling by the Washington, D.C., Public Service Commission, the firms issued a joint statement saying, “We believe our merger proposal is in the public interest, and we will continue working to complete the merger.”
The firms had already been expected to appeal, after the markets reacted unfavorably to the commission’s ruling on Aug. 25. The firms have 30 days to appeal.
The proposed Pepco deal is significant for Exelon because some of its nuclear-generating plants in Illinois are unprofitable, and merging with Pepco, which supplies 2 million customers in Washington, D.C., and its Maryland suburbs, would provide more predictable revenues.
But although five other regulatory agencies had already approved the deal, the Washington commission ruled the merger was “not in the public interest,” citing concerns that Exelon might be more interested in shoring up its power generation business than in serving Washington residents.
Critics of Exelon last week hailed the regulatory ruling, saying the company was getting its comeuppance for lobbying to raise the prices that Illinois customers pay and for its stance against renewable-energy sources generated by wind and solar power.
But Exelon and Pepco’s statement Monday said that the companies “remain convinced the decision fails to recognize the substantial immediate and long-term benefits of our merger proposal to citizens, businesses and communities in the District of Columbia.”