22 June 2006 — Exelon Corp. and Public Service Enterprise Group Inc. announced today that they have reached a comprehensive agreement with the Antitrust Division of the United States Department of Justice (DOJ), which resolves all competition issues reviewed by the DOJ in connection with the proposed merger of Exelon and PSEG.
Under the terms of the DOJ agreement, Exelon and PSEG will divest fossil-fuel fired electric generating stations with a total capacity of approximately 5,600 MW, assuring that the merger will not adversely affect competition. No divestiture of nuclear capacity or nuclear plants would be required by DOJ, as the increased fossil divestiture will resolve all competition issues. The fossil divestiture required by the settlement with DOJ will satisfy the requirements imposed by the Federal Energy Regulatory Commission (FERC) to divest fossil generation. The virtual nuclear divestiture approved by FERC in June 2005 continues to be a FERC requirement even though it is not required by DOJ. The divestitures will be required only if the merger closes.
The final decision on whether to proceed with the merger will rest with the boards of both Exelon and PSEG after the terms and conditions of regulatory requirements are known.
Closing is anticipated in the third quarter upon completion of all required regulatory actions.
The agreement with DOJ requires Exelon Electric & Gas to enter into agreements within 150 days after the merger closes to sell the following power plants and would give DOJ approval rights over the buyers to assure a competitive market after the divestiture:
- Linden, a 1,544 MW combined cycle natural gas and peaking (gas/oil) facility owned by PSEG (Linden, N.J.)
- Eddystone, a 1,408 MW coal-fired, mid-merit (oil/gas) and peaking (oil) facility owned by Exelon (Eddystone, Pa.)
- Mercer, a 777 MW coal- and natural gas/oil-fired facility owned by PSEG (Hamilton, N.J.)
- Hudson, a 991 MW coal- and natural gas-fired facility owned by PSEG (Jersey City, N.J.)
- Sewaren Units 1-4, a 453 MW natural gas/oil steam facility owned by PSEG (Woodbridge, N.J.)
- Cromby, a 345 MW coal- and natural gas/oil-fired facility owned by Exelon (Phoenixville, Pa.)
The divestiture would be the largest required in an energy company merger, involving 26 generating units located at these six plants.