Looks like it’s back to the drawing board for supporters of the Exelon-Pepco merger.
In a 2-to-1 decision, the D.C. Public Service Commission, the District’s utility company watchdog, knocked down the $6.8 billion deal that, if approved, would’ve combined energy companies Pepco Holdings, Inc. and Exelon Corporations and their umbrella organizations. Commission Chair Betty Ann Kane said the merger didn’t “meet the public interest.”
“This deal has turned into concessions of no benefit to D.C. payers. It diminishes the impact of Pepco, making it second-tier company at a time of change in the energy field,” Kane said Tuesday morning before dozens of residents, government officials, and reporters. Her statement elicited claps and howls from the audience.
“Pepco would be constrained. When this proposed deal was discussed, the joint applicants had to meet their burden in showing that it was in the public interest. They haven’t done that so the application is denied,” she added.
This announcement comes after months of witness testimony and deliberation.
Last April, Pepco and Exelon announced the cash transaction that, pending approval by regulatory boards in D.C. and neighboring states, would create what representatives describe as the “leading Mid-Atlantic electric and gas utility company. The new entity would serve 10 million customers and command a rate base of nearly $26 billion.
Exelon, based in Chicago, owns nearly two dozen plants, making it the U.S.’ largest nuclear operator. Under the deal, shareholders would receive a premium of nearly 25 percent on the share price of $25.27. While Pepco representatives said the merger would improve customer service and reliability, some local customers remained unconvinced.
Regulatory boards in Maryland, Virginia, and Delaware approved the deal without much fanfare, but the impending consolidation drew the ire of D.C. residents, some of whom thought it benefited stockholders more than customers. Their inquiries culminated into a case brought by the Office of the People’s Counsel in D.C.. A point of contention centered on what consider a disregard for standards meant to prevent future outages. Disproportionate spread of amenities counted as another concern, as Sandra Mattavous-Frye, the People’s Counsel of D.C., told the Washington Informer earlier this year, noting that Baltimore received a new office building and money for low-income residents.
Now questions arise as to what happens next, as the District stands alone in its opposition to a deal that affects neighboring states. But one thing remains certain: the work continues for some elected officials. “I need to read the decision,” D.C. Council member Vincent Orange (D-At-Large), told AllEyesOnDC. “The question is where do we go from here? How do we provide service and continue with the Public Service Commission’s goals of meeting service. They say we can do it without the merger.”