WASHINGTON (CN) - The Department of Justice will allow Exelon Corp.'s $7.9 billion purchase of Constellation Energy Group, if the companies sell three power plants in Maryland.
The Justice Department's Antitrust Division filed a civil lawsuit to block the merger, along with a proposed settlement that, if approved by the court, would resolve the complaint.
Prosecutors said the purchase "as originally proposed, would substantially lessen competition for wholesale electricity, ultimately increasing electricity prices for millions of consumers in the mid-Atlantic region."
The merger would create one of the largest electricity companies in the United States, with assets of $72 billion and annual revenue of $33 billion, and would combine the assets of two large competitors in the mid-Atlantic region.
Together, the companies would own 22 to 28 percent of the generating capacity in the densely populated region, including Delaware, the District of Columbia, New Jersey, Eastern Pennsylvania, and parts of Maryland and Virginia.
Such market power would enable them to raise wholesale electricity prices and reduce output.
The three power plants to be divested are Brandon Shores and H.A. Wagner in Anne Arundel County, Md., and C.P. Crane in Baltimore County.
Combined, the plants provide more than 2,600 megawatts of generating capacity. Chicago-based Exelon owns the PECO utility of Philadelphia and the Commonwealth Edison utility of Chicago. It had more than $18.6 billion in revenue in 2010.
Baltimore-based Constellation owns the BG&E utility of Baltimore. It had more than $14.3 billion in revenue in 2010.Follow @davejourno
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