Photo by nevermindtheend.

Photo by nevermindtheend.

Today the D.C. Office of the People’s Counsel came out against the new terms for the proposed merger between Pepco and Exelon. The revisions to the settlement came on Friday from the Public Service Commission, which first rejected the merger and then approved of alternate terms.

“The Commission’s order eviscerates the benefits and protections essential to render the proposed merger in the public interest by making changes to the $25.6 million rate offset provision for residential customers which was the single most critical provision I supported,” People’s Counsel Sandra Mattavous-Frye said.

The Office of the People’s Counsel is an independent agency of the D.C. government that represents energy and telecommunications services customers. It originally opposed the merger rejected by the D.C. Public Service Commission in August, which said that “it is not in the best interest of the people of the District of Columbia.” Then, when Mayor Muriel Bowser came out in October with a new settlement that she said “puts District residents and ratepayers first,” the OPC threw its support behind it. Since then, both proponents and opponents have duked it out in the court of public opinion.

Now, Mattavous-Frye says that the the PSC’s revisions to the settlement “nullify the benefits” that compelled her office to support the $6.8 billion merger. “The PSC’s alternative proposal for the application of the $25.6 million rate offset could translate into much higher rates for residential consumers because it removes a benefit essential to the justness and reasonableness of the merger for District residential customers.”

Pepco and Exelon have 14 days from last Friday to review the new terms of the deal, and both companies have released statements saying they’re looking into whether they’ll move forward. Financial analysts see the PSC’s decision as a win for advocates of the merger. Bloomberg reports that Guggenheim Securities LLC wrote Friday in a research note that Exelon will agree to the terms “given how the amendments seem relatively minor.”

Mayor Bowser is reviewing the new deal “to determine if it meets our goals for ratepayers, especially residents” as well. If all nine parties accept the new terms within two weeks, the takeover will be approved.

Already opponents of the merger are hailing the stance from the People’s Counsel.

Filed Under: exelon, merger, People's Counsel, pepco, pepco-exelon, Public Services Commission,