* Exelon wants to complete $7.9 B merger in Q1 2012
* Illinois AG wants FERC to reject PJM settlement
* AG questions market power issues in N. Illinois
NEW YORK, Nov 2 (Reuters) - Illinois Attorney General Lisa Madigan filed with federal energy regulators opposing a settlement in the proposed merger of Exelon and Constellation Energy and PJM’s market monitor.
She told the U.S. Federal Energy Regulatory Commission (FERC) the settlement with the PJM’s market monitor did not address the effect of the proposed $7.9 billion merger on the Northern Illinois market.
PJM is the power grid operator for 13 U.S. Mid-Atlantic and Midwest states and the District of Columbia, including Illinois where Exelon is based and Maryland where Constellation is based.
In an email statement, Exelon said, “We firmly believe that we have satisfied the Commission’s market-concentration tests and fully mitigated any market-power concerns.”
In her letter, Madigan pointed out that units of Exelon and Constellation both sell power to the Illinois Power Agency, which is the state agency responsible for buying power for customers who do not access the retail market for electricity.
The settlement with the PJM market monitor focused on potential market power issues in the eastern part of PJM. Exelon and Constellation agreed to sell 2,681-megawatts of capacity at three coal-fired power plants in Maryland as part of that settlement, among other things.
Madigan said Constellation is one of the few major suppliers that participates in the Illinois Power Agency’s power procurement events and that supplies power to the default customers of Exelon’s Commonwealth Edison subsidiary.
She wants FERC to reject the PJM market monitor settlement agreement and look into the increased market power a merged Exelon-Constellation will have on the Northern Illinois power market.
Maryland regulators are also questioning Exelon and Constellation executives this week on the proposed merger and its effects on that state.
Exelon hopes to complete the deal during the first quarter of 2012.