Pepco Holdings

Pepco Holdings was a U.S. holding company created in February 2001 to organize the acquisition of Conectiv Power Delivery by Potomac Electric Power Company, commonly known as Pepco. The transaction closed on August 1, 2002, and Pepco and Conectiv became wholly owned subsidiaries of Pepco Holdings. Through these businesses, the company controlled a group of regulated electric utilities and related energy operations serving the Mid-Atlantic United States. The corporate structure reflected earlier consolidation in the regional electricity industry. Conectiv had been formed in 1998 as the holding company for Delmarva Power & Light Company, generally known as Delmarva Power, and Atlantic City Electric Company. These companies had been brought together through the combination of Delmarva Power and Atlantic City Electric. Pepco Holdings subsequently operated the businesses under a portfolio structure rather than presenting every subsidiary under one consumer-facing brand. In 2005, it resumed using the Delmarva Power and Atlantic City Electric names for operations. Conectiv Energy remained the principal surviving Conectiv-branded business and was used for the group's energy-production facilities. The group's regulated utility footprint covered several adjoining Mid-Atlantic markets. Pepco served Washington, D.C., and surrounding Maryland communities. Delmarva Power operated in Delaware and on the Maryland portion of the Delmarva Peninsula, while Atlantic City Electric served southern New Jersey. The portfolio therefore combined urban electricity distribution in the national capital region with utility operations in Delaware, Maryland, and New Jersey. In 2008, Delmarva Power sold its Virginia service territory to A&N Electric Cooperative and Old Dominion Electric Cooperative for $44 million, narrowing the company's presence in Virginia. Pepco Holdings also owned energy-production activities through Conectiv Energy. In April 2010, it sold Conectiv Energy to Calpine Corporation, simplifying the group and leaving the regulated utility businesses as its central operating focus. The company appeared on the 2006 Fortune 500 at number 283 by gross revenue. Its financial and regulatory profile was shaped heavily by utility rate decisions: operating profit doubled in 2011, with approved rate increases in Delaware, Maryland, New Jersey, and Washington, D.C. contributing to the improvement. The company attracted criticism over lobbying, taxation, executive compensation, and its relationship with regulators. Public Campaign criticized its reported lobbying expenditures and tax position during 2008–2010, while the company also restated certain 2005 financial statements in 2006 to correct the accounting for deferred compensation arrangements. Exelon announced an agreement to acquire Pepco Holdings in April 2014. Although the transaction received approval from several federal and state regulators, the District of Columbia Public Service Commission initially rejected it in August 2015. A revised transaction package was approved by the commission on March 23, 2016, and the merger closed the same day. Pepco Holdings consequently ceased to operate as an independent holding company, with its utility businesses becoming part of Exelon's regulated utility portfolio.

Pepco Holdings emerged from the restructuring and consolidation of electric utilities in the Mid-Atlantic United States. Conectiv was established in 1998 as a holding company for Delmarva Power & Light Company and Atlantic City Electric Company following the combination of those businesses. Pepco Holdings was incorporated in February 2001 to facilitate Potomac Electric Power Company's acquisition of Conectiv Power Delivery. That acquisition was completed on August 1, 2002, after which Pepco and Conectiv operated as wholly owned subsidiaries of the new holding company. The resulting group brought together several regional utility franchises. Pepco served Washington, D.C., and nearby Maryland suburbs. Delmarva Power served Delaware and the Maryland portion of the Delmarva Peninsula, and Atlantic City Electric served southern New Jersey. The group also retained energy-production operations under the Conectiv Energy name. In 2005, Pepco Holdings restored the Delmarva Power and Atlantic City Electric names for operating activities, leaving Conectiv Energy as the principal remaining Conectiv-branded operation. The company adjusted its portfolio during the late 2000s and early 2010s. In 2008, Delmarva Power sold its Virginia service area to A&N Electric Cooperative and Old Dominion Electric Cooperative. In April 2010, Conectiv Energy was sold to Calpine Corporation. These changes reduced the holding company's non-core and generation-related activities and emphasized its regulated utility subsidiaries. Pepco Holdings was included in the 2006 Fortune 500 at number 283 by gross revenue. Its performance was closely connected to regulatory decisions governing electric rates. The company reported a doubling of operating profit in 2011, which the reference account attributes in part to approved rate increases in Delaware, Maryland, New Jersey, and Washington, D.C. The company also faced public criticism regarding lobbying expenditure, taxes, rebates, and executive compensation. Separately, it restated certain 2005 financial statements in 2006 to correct the accounting treatment of deferred compensation arrangements. Exelon announced a proposed acquisition of Pepco Holdings on April 30, 2014. The transaction encountered opposition from the District of Columbia Public Service Commission, which rejected it in August 2015 even though other regulators had approved it. Exelon and Pepco Holdings pursued revised terms, and the commission approved the transaction on March 23, 2016. The merger was completed on the same date, ending Pepco Holdings' existence as an independent holding company and transferring its utility operations into Exelon's business structure.

1. 2016Merger with Exelon is completed

   The Exelon acquisition received revised approval from the District of Columbia Public Service Commission and closed on March 23, 2016.

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2. 2010Conectiv Energy is sold

   Pepco Holdings sold Conectiv Energy to Calpine Corporation in April 2010.

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3. 2008Virginia service territory is divested

   Delmarva Power sold its Virginia service area to A&N Electric Cooperative and Old Dominion Electric Cooperative.

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4. 2005Operating brands are restored

   Pepco Holdings resumed using the Delmarva Power and Atlantic City Electric names for operations.

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5. 2002Acquisition of Conectiv Power Delivery closes

   The transaction closed on August 1, 2002, making Pepco and Conectiv wholly owned subsidiaries of Pepco Holdings.

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6. 2001Pepco Holdings is incorporated

   Pepco Holdings was incorporated in February 2001 to facilitate the acquisition of Conectiv Power Delivery by Potomac Electric Power Company.

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7. 1998Conectiv is established

   Conectiv was formed as the holding company for Delmarva Power & Light and Atlantic City Electric after the combination of those utilities.

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A regional electric-utility holding company focused primarily on regulated electricity distribution across the Mid-Atlantic United States, with additional energy-production activities before the 2010 sale of Conectiv Energy.

• Pepco electric serviceRegulated electricity distribution

  Pepco provided regulated electric distribution service in Washington, D.C., and surrounding Maryland suburbs. It was one of the principal operating utility businesses within Pepco Holdings and served a primarily urban and suburban customer base under the Pepco name.

• Delmarva Power electric serviceRegulated electricity distribution

  Delmarva Power supplied regulated electricity service in Delaware and in the Maryland portion of the Delmarva Peninsula. The business was part of the Conectiv structure before becoming part of Pepco Holdings and continued operating under its established regional brand.

• Atlantic City Electric serviceRegulated electricity distribution

  Atlantic City Electric served customers in southern New Jersey as a regulated electric utility. It was one of the regional operating brands brought into the Pepco Holdings portfolio through the earlier Conectiv structure.

• Conectiv EnergyEnergy production

  Conectiv Energy was the Pepco Holdings brand associated with the group's energy-production facilities. It was the remaining major Conectiv-branded operating business after the restoration of the Delmarva Power and Atlantic City Electric names and was sold to Calpine in April 2010.

• 2016Complete merger with ExelonM&A

  The District of Columbia Public Service Commission rejected the original transaction in August 2015, although other regulators had approved it.

  What changed. Under revised terms, the commission approved the merger on March 23, 2016, and the transaction closed that day.

  Aftermath. Pepco Holdings ceased to operate as an independent holding company and its utility businesses became part of Exelon.

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• 2014Agree to proposed Exelon acquisitionM&A

  Exelon sought to acquire Pepco Holdings and combine its regulated utility businesses with Exelon's existing utility portfolio.

  What changed. Exelon announced the proposed purchase of Pepco Holdings on April 30, 2014.

  Aftermath. The proposal entered a multistate regulatory review and was initially rejected by the District of Columbia Public Service Commission.

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• 2010Sell Conectiv Energy to CalpineM&A

  Conectiv Energy represented Pepco Holdings' energy-production facilities and was distinct from its principal regulated distribution utilities.

  What changed. Pepco Holdings sold Conectiv Energy to Calpine Corporation in April 2010.

  Aftermath. The sale reduced Pepco Holdings' generation-related activities and concentrated the group more heavily on regulated utility operations.

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• 2008Divest Virginia service territoryM&A

  Delmarva Power operated service territory on the Delmarva Peninsula, including an area in Virginia.

  What changed. Delmarva Power sold its Virginia service area to A&N Electric Cooperative and Old Dominion Electric Cooperative.

  Aftermath. Pepco Holdings reduced its Virginia operating footprint.

  Sale price. $44 million (2008)

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• 2005Restore regional utility brandsStrategy

  Pepco Holdings had been operating with the Conectiv structure created through the combination of Delmarva Power and Atlantic City Electric.

  What changed. The company resumed using the Delmarva Power and Atlantic City Electric names for operating purposes, while retaining Conectiv Energy for energy-production facilities.

  Aftermath. The portfolio continued to present established regional utility brands to customers rather than relying on a single Pepco Holdings consumer identity.

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• 2011Criticism over lobbying, taxation, and executive compensationControversy

  Public Campaign criticized Pepco Holdings in December 2011, citing reported lobbying expenditure, the company's tax position during 2008–2010, and increased compensation for its five highest-paid executives. The criticism formed part of broader debate over corporate tax practices and executive pay.

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• 2016Revised Exelon merger is approved and completed

  On March 23, 2016, the District of Columbia Public Service Commission approved the transaction under revised terms, and the merger with Exelon closed that day.

  M&A
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• 2016District of Columbia approves revised Exelon merger

  The District of Columbia Public Service Commission approved the transaction under revised terms, allowing the merger to close on March 23, 2016.

  M&ARegulation
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• 2015District of Columbia regulator initially rejects Exelon merger

  The District of Columbia Public Service Commission rejected the proposed Exelon acquisition in August 2015, despite approvals from other federal and state regulators.

  M&ARegulation
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• 2015District of Columbia regulator rejects Exelon transaction

  The District of Columbia Public Service Commission rejected the proposed Exelon acquisition in August, despite approvals from other regulators.

  M&ARegulation
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• 2014Exelon announces proposed acquisition of Pepco Holdings

  Exelon announced its proposed purchase of Pepco Holdings on April 30, 2014, beginning a multijurisdictional regulatory review.

  M&A
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• 2011Pepco Holdings reports higher operating profit

  Operating profit doubled in 2011, with approved utility rate increases in Delaware, Maryland, New Jersey, and Washington, D.C., identified as contributing factors.

  PricingRegulation
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• 2010Conectiv Energy is sold to Calpine

  Pepco Holdings sold Conectiv Energy to Calpine Corporation in April 2010, ending the group's direct ownership of that energy-production business.

  M&A
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• 2010Pepco Holdings sells Conectiv Energy to Calpine

  The company divested Conectiv Energy to Calpine Corporation, reducing its exposure to energy-generation operations.

  M&A
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• 2008Delmarva Power sells Virginia service territory

  Delmarva Power sold its Virginia service area to A&N Electric Cooperative and Old Dominion Electric Cooperative, reducing Pepco Holdings' Virginia operations.

  M&A
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• 2006Pepco Holdings restates prior financial statements

  Pepco Holdings restated its consolidated financial statements for the three and six months ended June 30, 2005, to correct accounting for certain deferred compensation arrangements.

  Other
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• 2006Pepco Holdings reaches number 283 on the Fortune 500

  Pepco Holdings was ranked 283rd on the 2006 Fortune 500 list of U.S. companies by gross revenue.

  Other
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• 2005Pepco Holdings resumes Delmarva Power and Atlantic City Electric branding

  The company returned to using the Delmarva Power and Atlantic City Electric names for operating purposes, while retaining Conectiv Energy for its energy-production facilities.

  Other
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• 2002Pepco and Conectiv become Pepco Holdings subsidiaries

  The acquisition of Conectiv Power Delivery closed on August 1, 2002, making Pepco and Conectiv wholly owned subsidiaries of Pepco Holdings.

  M&A
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• 2002Pepco Holdings completes acquisition structure for Conectiv Power Delivery

  Pepco Holdings completed the transaction that placed Pepco and Conectiv under common ownership, establishing the company as a regional utility holding group.

  M&A
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• 2001Pepco Holdings is formed to acquire Conectiv Power Delivery

  Pepco Holdings was incorporated as a holding company for the planned acquisition of Conectiv Power Delivery by Potomac Electric Power Company.

  M&A
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1. Pepco Holdings