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FERC delays decision on Maryland company merger

Following a proposed merger between Exelon Corporation and Maryland's Constellation Energy Group, both companies expected the Federal Energy Regulatory Commission to approve the deal in early November, but the Commission has delayed its decision in order to conduct a more thorough review of the sales terms. This could delay the completion of the transaction until April 2012.

FERC is a government agency responsible for monitoring interstate energy rates and also oversees any proposed Business acquisitions by companies in the electric, natural gas, oil pipeline and hydroelectric industries.

Representatives from both Exelon and Constellation said they anticipated a response regarding its proposed $7.9 billion deal from FERC before the end of 2011, but FERC recently added 180 days to the regulatory review period that is required before the companies would be allowed to merge. They added that both companies still expect to finalize the transaction in early 2012.

The companies have requested that FERC make a decision regarding the agreement by Jan. 5, in accordance with a deadline set by the Maryland Public Service Commission, saying that such a length of time should be sufficient for FERC to extensively review the agreement and ultimately approve the merger.

When the companies first submitted the merger proposal, FERC was reportedly concerned that the resulting business could cause energy prices to rise by dominating too much of the market, but the two sides eventually reached a settlement that allegedly assuaged the agency's concerns. While some expected that this would lead to a quick approval of the merger, FERC announced that it considers the settlement to be an amendment to the original proposal and needs the additional 180 days to review the change.

Source: Baltimore Sun, "FERC to take more time to review Constellation merger," Hannah Cho, Nov. 14, 2011

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