US electric utility merger
The US electrical and natural gas utilities have tended to be regional operations. They are local monopolies in their own areas, but none of them controls a major portion of the overall market. AT least, until now.
Exelon, an Illinois-based electric utility, and announced a merger with New Jersey-based Public Service Enterprise Group (PSEG). The $12 billion deal creates the largest power generating and distribution company in the country. The new company has customers in Illinois, Pennsylvania, and New Jersey, serving seven million households in electric and two million for gas.. It will have over $27 billion in revenue.
Exelon is itself the product of the merger in 2000 of Chicago-based Commonwealth Edison and Philadelphia's PECO. While that company is mostly an electric supplier, it also has a major natural gas supplier in the Philadelphia area. PSEG is the result of the merger of over 400 local gas and electrical utilities in New Jersey over the past century.
What advantages are there to the merger? The companies will claim synergy and a reduction of overhead costs, and indeed OSEG has been characterized as a poorly managed ("bloated") company. And it will give the company a small advantage at dealing with suppliers, especially of natural gas. But the biggest advantage may be the kind of political power that attaches to the #1 national company in any field. In the utilities industry, where public policy is a major factor in profitability, such political muscle is very imortnat.
If the deal gets an OK for regulators, it certain to inspire more national regional electric companies to acquire each other. If only out of fear/ The previous biggest merger of Us utilities was the 2000 deal between American Electric Power [AEP] and Central South West Power Corp., AEP now serves electric customers in 11 states and serves five million households. Other major electrical utilities include Ohio-based FirstEnergy (4.4 million), Texas-based CenterPoint Energy (4.3 million households), Georgia-based Southern Company (4.1 million ), Florida's FPL Group (4.1 million), Consolidated Edison of New York (3.1 million), Louisiana-based Entergy (2.6 million), North Carolina-based Duke Energy (2.2 million), and a number of smaller companies.
Most of these companies themselves have grown through mergers that followed the deregulation of the electrical industry in the 1990s, as state and local utilities became part of larger regional companies. Now the trend may well be to increasing to the next step with a few major companies dominating.
5:04:54 PM 
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