News Digest

Mergers & Acquisitions

PECO + UNICOM. The Federal Energy Regulatory Commission OK'd the merger of PECO Energy and Commonwealth Edison, to form Exelon, though it admitted that the deal would boost the merged company's control of generation capacity in the ComEd destination market far above acceptable levels, as defined in the commission's Appendix A screen measuring market power.

The FERC explained that the merged company would have little potential to manipulate prices by withholding capacity from markets, since almost all of the merged company's economic generating capacity would be made up of low-cost but inflexible base-load nuclear plants, which would be difficult to ramp up or ramp down quickly.

Meanwhile, on March 24, PECO submitted a merger settlement agreement to the Pennsylvania PUC that set numerous benchmarks and performance standards for reliability and service quality in that state, but that would not apply in Illinois, which has no authority to review the deal, because essentially it represents a takeover of Unicom by PECO.