DOJ Requires Divestitures for Exelon – Public Service Enterprise Group Merger

On June 22, the DOJ announced that the $16 billion merger between Exelon Corp. and Public Service Enterprise Group Inc. can proceed as long as they divest six electricity generating plants, which in total provide more than 5,600 megawatts of generating capacity. The DOJ is making the companies shed two generating plants in Pennsylvania and four in New Jersey.
The plants to be divested are Cromby Generating Station and Eddystone Generating Station in Pennsylvania, and Hudson Generating Station, Linden Generating Station, Mercer Generating Station and Sewaren Generating Station in New Jersey. Additionally, the combined company cannot acquire any existing electricity plants in the future without first getting the agency's approval. Without the divestitures, the DOJ said that wholesale prices for electricity would increase, causing residential rates for millions of consumers in the mid-Atlantic region to rise. The companies said as a result of the divestiture of electrical plants, all of which are fossil fueled, all competitive issues have been resolved and there would be no need to shed any additional nuclear capacity or nuclear plants. The divestitures will be required only if the merger closes. The merger needs one remaining regulatory approval from the New Jersey Board of Public Utilities to proceed. The DOJ's investigation and analysis encompassed millions of pages of documents, including testimony and other evidence presented by the staff of the New Jersey Board of Public Utilities, the New Jersey Ratepayer Advocate and many other parties in the New Jersey proceedings.