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Maryland regulators on Friday approved Exelon Corp.'s (EXC) proposed acquisition of Constellation Energy Group Inc. (CEG) in a deal valued at nearly $8 billion.
The Maryland Public Service Commission said it has approved the merger, with a list of 40 conditions, including that the companies provide $100 rebates for each of Constellation's Baltimore Gas & Electric utility customers, and that the combined company invest $113.5 million in energy efficiency and energy assistance for the utility's low-income customers.
The deal would allow Exelon, the largest U.S. operator of nuclear-power plants, to absorb Constellation's nuclear fleet and large retail-power business. It also would allow Constellation to be part of a much-larger company with a larger balance sheet.
Exelon and Constellation hailed the decision Friday and said they accepted the conditions.
"We are pleased that the Maryland PSC has approved our merger with Constellation, and we accept the additional conditions that the commission has imposed," Exelon President and Chief Operating Officer Christopher Crane said in a statement
The commission's approval wasn't surprising, after Exelon and Constellation in December reached an agreement with Maryland's governor and other officials. The companies agreed to invest $1 billion in Maryland and create roughly 6,000 new jobs in the state.
The companies still need the approval of the Federal Energy Regulatory Commission to proceed with their merger.
The companies earlier agreed to spend $625 million to develop 300 megawatts of new power generation, half of it in the form of solar, wind or other renewable power, and they agreed to spend $50 million to weatherize homes of low- and moderate-income customers. Their offer included earlier pledges to provide a one-time $100 rebate to each of BGE's 1.1 million residential customers and to build new offices in downtown Baltimore estimated to cost $95 million to $120 million.
Exelon Chief Executive John Rowe plans to retire after the merger closes. Crane will become president and CEO of Exelon.
Constellation Chief Executive Mayo Shattuck will become executive chairman of Exelon after the merger closes.
-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; firstname.lastname@example.org