Regulators extend deadline for Constellation-Exelon merger decision

Mergers, Acquisitions and TakeoversPoliticsRestructuring and RecapitalizationCrime, Law and JusticeBusinessJustice System

Maryland regulators agreed Friday to postpone their decision on the $7.9 billion merger of Constellation Energy Group and Exelon Corp. until Feb. 17, giving themselves more time to evaluate a proposed settlement between the companies and Gov. Martin O'Malley.

The extension of the deadline, which was initially set for Jan. 5, was expected after Exelon and Constellation agreed this week to $1 billion in concessions to gain the governor's support for the buyout. The companies promised to provide large renewable energy generation in Maryland, make significant investment for offshore wind development and add money to help low-income electricity customers.

The new deadline, though, was debated at Friday's conference before the Maryland Public Service Commission. The companies' attorneys wanted regulators to decide by mid- to late-January, but merger critics argued that more time was needed to evaluate the merits of the settlement.

PSC Chairman Douglas R.M. Nazarian said the commission would resist any pressure to make a decision before regulators had time to fully review the settlement.

"I understand that people in Chicago and Wall Street are chomping at the bits to get the deal closed. That's great," he said. But "we have a job to do."

EDF Group, one of Constellation's largest shareholders and its nuclear partner, opposes the settlement. EDF attorney Martin Flumenbaum argued that due process was compromised by the last-minute settlement.

The Maryland Office of People's Counsel also objects to the settlement and wants more time to review it, said attorney William Fields. The People's Counsel represents consumers before the commission.

Meanwhile, the staff of the PSC "passively" supports the settlement, said Leslie Romine, deputy staff counsel.

The commission will hold three more hearings on the settlement on Jan. 25, 26 and 27.

In a statement Friday, Exelon said, "Exelon and Constellation are not surprised that the MPSC needs a modest amount of additional time to review the settlement, but we remain optimistic that we will be in a position to close the merger in early 2012, very shortly after all our regulatory approvals are received."

hanah.cho@baltsun.com

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