Photo by Larry Janezich.

 

Photo by Larry Janezich.

 

After twists and turns galore, the D.C. Public Service Commission approved the $6.8 billion merger between local utilities company Pepco and the Chicago-based Exelon.

“The Commission has concluded that the Proposed Merger … is in the public interest,” the PSC said.

In a two to one vote, the PSC approved of a modified version of a deal that it proposed when it rejected the settlement brokered by Mayor Muriel Bowser only a few weeks prior, setting new terms that the People’s Counsel, Bowser, and other parties opposed. In that moment, opponents tentatively celebrated what seemed like the end of the deal that just wouldn’t die.

And now, the merger is alive once again—stronger than before. Ward 3 Councilmember Mary Cheh, a staunch enemy of the deal, says that the road ahead looks bleak for opponents. “I don’t see any significant basis on which to oppose” the PSC ruling, she says. “It’s not enough that you don’t like it. You’d have to show that it’s arbitrary and capricious.” While people might file lawsuits, she doesn’t see them going much of anywhere.

At issue in in the back-and-forth between the PSC, the Bowser administration, and other parties were how the city would distribute $78 million in funds to ratepayers—specifically, $25.6 million to freeze rate hikes. On March 7, Pepco and Exelon submitted three separate approaches to the merger.

PSC went with the second option, which the Bowser administration took issue with. “It appears the Public Service Commission favors government and commercial ratepayers over D.C. residents,” Bowser said in a statement. “Instead of a three year rate increase reprieve that we negotiated, it appears that D.C. residents will be hit with a rate increase as soon as this summer.”

Cheh says all of the proposals are bad for ratepayers. “It’s a fundamentally flawed deal and we will come to regret it,” she says. “Anything we thought we got is a pittance in comparison to what they’ll reap.”

Pepco’s stock has surged on the news.

“We must carefully review the Commission’s order,” Vincent Morris, spokesperson for Pepco, said right after the ruling was announced. “Once we have had a chance to do so, we will have more to say about what it means and our next steps.”

Later in the evening, Pepco and Exelon announced that “the two companies have completed their merger transaction, effective today … The Pepco Holdings companies have joined the Exelon family of companies, and integration efforts are well underway.”

The People’s Counsel announced over Twitter it had “concerns” about the approval.

Opponents already know where they stand. “The D.C. Public Service Commission has abdicated its responsibility to put the public interest before corporate profits,” Public Citizen said in a release. “This is a huge loss for consumers, a discouraging setback for the institutions entrusted to protect them and a sad commentary on how things are done in the District.”

The merger has been in talks for two years, and weathered two previous rejections from the PSC.

This post will be updated.

PSC Pepco-Exelon Order

Filed Under: pepco, Pepco-Exelon merger,