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Exelon Corp. and Pepco Holdings Inc. (PHI) have filed an application with the Maryland Public Service Commission (PSC) seeking approval of the energy companies' massive merger. In April, Exelon announced its plan to purchase PHI for $6.8 billion.

The proposed merger would bring together Exelon's three electric and gas utilities - BGE, ComEd and PECO - and PHI's three electric and gas utilities - Atlantic City Electric, Delmarva Power and Pepco.

“The filing we are making today describes in detail how our proposed merger will benefit Maryland’s economy and the customers served by Pepco and Delmarva Power,” says Chris Crane, Exelon president and CEO.

Pepco serves approximately 537,000 customers in Montgomery and Prince George’s counties, and Delmarva Power serves approximately 231,000 customers on Maryland’s Eastern Shore.

According to Exelon, benefits to PHI utility customers and service territories described in the regulatory filings include the following:

- Upon closing of the merger, Exelon will provide an aggregate $100 million, of which $40 million will go to benefit Pepco and Delmarva Power customers in Maryland. The funds can be used as the PSC deems appropriate for customer benefits, such as bill credits, assistance for low-income customers and energy-efficiency measures.

- Exelon has committed to provide $50 million over 10 years to charitable organizations and programs in the communities the PHI utilities serve - exceeding PHI’s 2013 funding levels. Exelon will exceed PHI’s 2013 charitable giving of $623,000 in Maryland.

- Exelon says it has committed to no net involuntary merger-related job losses of Pepco and Delmarva Power utility employees for at least two years after the merger and to honor all collective bargaining agreements. Exelon and PHI have announced that upon the retirement of Joe Rigby at the close of the merger, Dave Velazquez, currently executive vice president of PHI Power Delivery, will become president and CEO of the PHI utilities. Donna Cooper (Pepco) and Gary Stockbridge (Delmarva Power) will also remain with the company in their roles as regional presidents.

- Exelon says it has committed to build on the improvements to service reliability that Pepco and Delmarva Power have already achieved for customers in recent years by setting new, more stringent reliability targets. By 2020, Exelon commits to reducing the frequency of power outages for Pepco by 38% and average outage duration by nearly 43% compared with the 2011-2013 period. In the Delmarva Power service area, Exelon has committed to reducing the frequency of outages by nearly 40% and average outage duration by 53% compared with the 2011-2013 period. Exelon has offered to be subject to financial penalties if Delmarva Power or Pepco do not meet their targets.

Exelon and PHI have already made transaction-related filings with the Federal Energy Regulatory Commission, the Virginia State Corporation Commission, the Delaware Public Service Commission, the Public Service Commission of the District of Columbia and the New Jersey Board of Public Utilities. The merger is also subject to the notification and reporting requirements under the Hart-Scott-Rodino Act and other customary closing conditions.

The transaction requires the approval of the stockholders of PHI, which is scheduled to take place on Sept. 23. The companies anticipate completing the merger in the second or third quarter of 2015.

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