FERC says A-OK on Exelon/NRG merger *update*

The Federal Energy Regulatory Commission gave its stamp of approval on Exelon’s acquisition of NRG Energy. Now they just need shareholders and management to sign on and they’re all set.
In a statement Exelon executive vice president, government and environmental affairs and public policy Elizabeth A. Moler said “the combination with NRG remains on track for closing in the fourth quarter of 2009,” but NRG notes in the FERC order has a few stipulations, including:

(1) Exelon Corp.’s (Exelon) acquisition of voting securities of NRG Energy through a tender offer, (2) Exelon’s acquisition of control over NRG Energy and its subsidiaries that are public utilities subject to the Commission’s jurisdiction (collectively, NRG), and (3) the subsequent restructuring and consolidation of the generation operations of the two companies to establish a more efficient corporate structure for the combined company.

It’s not clear if FERC includes the limits to its authority over power plant operations in much of Texas since the state’s main grid operation, ERCOT, doesn’t cross state lines and is exempt from much of FERC’s oversight. It’s also not clear why FERC should be concerned about “a more efficient corporate structure” for the combined company, since corporate governance really isn’t something the FERC normally gets much say in. Any guesses why that’s in there?
In a statement NRG said there are a number of other regulatory hurdles remaining in what is still a hostile takeover bid.

“The key issue is Exelon’s continued refusal to offer appropriate value to NRG stockholders. The NRG Board and management team continue to believe that Exelon’s proposal significantly undervalues NRG and remains highly conditional, including the need to obtain financing, and very risky because of rating agency and other concerns.”

The statement also points out that Exelon got similar FERC approval in its attempt to take over Public Service Enterprise Group (PSEG) … “yet after two years and after spending approximately $130 million in the process, it still was unable to consummate a transaction.”
Stay tuned for the … still no date set for NRG’s annual shareholder meeting, however.
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Update
By the way, remember when Exelon’s John Rowe said last week the company would likely not build a new nuclear power plant in Victoria, Texas because the project isn’t on the short-list for federal loan guarentees? Turns out he didn’t really say that, according to an Exelon spokesman in Victoria.
In a story in the Victoria Advocate the Chronicle was accused of twising Rowe’s words:

“He said what we’ve said all along. We cannot build the Victoria project without loan guarantees,” said Bill Harris, Exelon’s Victoria-based community outreach manager. “This shouldn’t come as a surprise to anyone. Exelon’s still in the early application stages. We didn’t expect to be among the top projects to get loan guarantees.”

Of course should Exelon succeed in buying NRG it would have a new nuke project at the head of the line for loan guarentees.

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