POM Pepco Holdings,

By Rebecca Smith 

Exelon Corp.'s $6.8 billion bid to buy Pepco Holdings Inc. cleared its final hurdle Wednesday, as regulators in the District of Columbia approved the deal creating one of the largest publicly traded utilities in the U.S.

By a split vote, D.C.'s Public Service Commission agreed to let the transaction move forward after the companies modified their merger terms to reduce the possibility of higher power prices in future years.

D.C. regulators had previously rejected the deal, calling it damaging to consumers, which forced the utilities to revamp their proposal.

Regulators in other states, including Maryland, New Jersey and Delaware, have already given the deal their blessing. The D.C. body was the last agency needed to approve the Exelon-Pepco combination.

Pepco's stock jumped 27% on the news in afternoon trading.

Exelon spokesman Paul Elsberg said the company is still reviewing the order. "Once we've had a chance to do so, we will have more to say about what it means and next steps," he said in an email.

The D.C. commission ultimately decided that the deal would help electricity consumers, largely by providing a $130 million package of benefits including measures to advance conservation, energy efficiency and subsidizing some consumers' bills in the district.

Charles Harak, an attorney for the National Consumer Law Center, said the final order from D.C. provides district consumers more benefits than some customers in other states. That could entitle consumers in states that previously approved the deal to an increase in their subsidy programs and other benefits.

Exelon's Mr. Elsberg said the latest regulatory action raises the cost of the merger.

"If the merger closes, we will return to the commissions in Delaware, Maryland and New Jersey to increase our merger packages," he said.

Write to Rebecca Smith at rebecca.smith@wsj.com

(END) Dow Jones Newswires

March 23, 2016 15:52 ET (19:52 GMT)

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