D.C. Regulators Reject Exelon, Pepco Merger

The merger had been approved by the Federal Energy Regulatory Commission, the U.S. Department of Justice and by the states of Maryland, Delaware and New Jersey.

Commissioners rightly listened to the many public interest voices opposed to the deal and determined that it failed to meet the District’s standard of public interest.

The Public Service Commission of Columbia denied the $6.8 billion deal, which was expected to make Exelon the largest utility in the US in terms of customers.

Tuesday’s vote on the three-member D.C. commission was two to one, the Washington City Paper reported. “This decision is forever”. While the merger would offer some benefits, Kane said some factors could prove harmful to the District.

Among the tangible benefits were the buyout of Pepco shareholders and a $33.75 million customer investment fund, she said.

Exelon owns a large fleet of power plants and big utilities that serve the Chicago, Philadelphia and Baltimore areas. In particular, Kane told the mostly anti-merger crowd at the commission meeting that the more complex structure of Exelon’s ownership would “negatively impact the commission’s ability to regulate” the utility, and that in a time of dramatic change in the energy sector, Pepco’s “ability to adapt will be constrained by an increased management bureaucracy”.

Power DC, a coalition of District citizens that had opposed the merger, applauded the decision as a victory for local ratepayers. “We will review our options with respect to this decision and will respond once that process is complete”, the companies said.

“We applaud the PSC for recognizing that this almost $7 billion proposed merger would have raised rates and stunted wind and solar development, as well as efficiency gains, across D.C.’s customer base for electricity”, said Mike Tidwell, director of the Chesapeake Climate Action Network, in a statement following the ruling.