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Exelon agrees to pay $400,000
Settles with Justice over claims of contempt
Question of the Day
Exelon Corp. agreed on Thursday to pay $400,000 as part of a civil settlement with the Justice Department to resolve the company’s alleged violation of two court orders in its sale of three electricity plants in Maryland in order to purchase the Constellation Energy Group.
The Justice Department's Antitrust Division filed a petition in U.S. District Court in the District, asking the court to find Exelon in civil contempt. The department also filed a settlement agreement and order, subject to court approval, that would resolve the department’s concerns.
“In order for the Antitrust Division’s settlements to be effective in preserving competition and protecting consumers, companies must fully adhere to the terms of their court-ordered agreements,” said Acting Assistant Attorney General Joseph F. Wayland, who heads the Justice Department's Antitrust Division. “The Antitrust Division will vigorously prosecute those who enter into agreements with the department and do not comply with their legal obligations.”
Under a December 2011 consent decree, Exelon was required to sell three electricity plants in Maryland — Brandon Shores and H.A. Wagner in Anne Arundel County, and C.P. Crane in Baltimore County — to proceed with its $7.9 billion merger with Constellation.
Count records show Exelon was required to abide by a hold separate stipulation, which isolates the disputed section of the agreement, until it finalized the acquisition of Constellation and completed the plant divestitures required by the consent decree. The hold separate required Exelon to bid certain of its electricity generating plants at or below cost to ensure that the company would not be able to raise market prices for electricity.
In consenting to the hold separate and the consent decree, Exelon specifically agreed to “take all steps necessary to comply” with its legal obligations.
The Justice Department said, according to its petition, that Exelon failed to fulfill its obligations under the two court orders, saying the company submitted offers for sales of electricity during this period at above-cost prices and that Exelon failed to take all necessary steps to ensure that its offers would comply with the hold separate’s requirements.
In determining the settlement amount, the department said it took into account that Exelon took appropriate remedial steps, including notifying the Federal Energy Regulatory Commission and the Maryland Public Service Commission, both of which also approved Exelon’s acquisition of Constellation. It said the company also implemented measures to ensure that no additional above cost-offers occurred and agreed with regulators to return any incremental revenues Exelon had earned.
Exelon, with $18.9 billion in revenues in 2011, is incorporated in Pennsylvania and has its headquarters in Chicago. It owns the PECO utility of Philadelphia and the Commonwealth Edison utility of Chicago. With its acquisition of Constellation Energy, it now owns the BG&E utility of Baltimore.
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