$6.8 Billion DC Utility Merger Faces Rejection From Office Of The People’s Counsel
In a significant setback for a proposed new utility, the DC Office of the People’s Counsel rejected all Exelon and Pepco proposals on Friday for their planned $6.8 billion utility merger.
In a press release, OPC filed its response to Public Service Commission Order No. 18109 of February 26, 2016 and the Pepco-Exelon (joint applicants) motion, filed on March 7, 2016, stating that it cannot accept any of the proposals. People’s Counsel Sandra Mattavous-Frye said, “Neither of the alternatives offered by the PSC or the joint applicants guarantees the type of rate protection I have been seeking in this case for almost two years.“
“The rejection deals another blow to a merger that would create the nation’s largest utility, but has struggled to gain approval in the District of Columbia,” UtilityDIVE observed as it broke the news.
The Pepco-Exelon submission presents the PSC with three options: (1) adopt the original settlement agreement; (2) adopt the PSC’s revision to that agreement; or (3) adopt a further revision to the PSC’s alternative. Mattavous-Frye said OPC has procedural and substantive concerns with all of the options presented. The joint applicants’ first option essentially requests the PSC to reconsider its February 26 decision to reject the original settlement agreement. Their second option is a request for all parties to accept the PSC’s alternative proposal presented in Order No. 18109. “I rejected that option as it strips away the rate protection I supported in the original settlement agreement. Moreover, the last option is almost certain to fail as it does not provide a viable alternative that addresses the PSC’s enumerated concerns.”
After two years of hearings, the Exelon-Pepco merger saga continues, stated UtilityDIVE, adding, “…a spokesperson for Mayor Muriel Bowser’s office said it had no comment at this time.” It referred only to its statement made on March 1, in which the Mayor came out against the new conditions required for approval that were placed on the deal by the PSC in its February 26 ruling to reject the deal as proposed. That PSC order, according to the mayor, “guts much-needed protections against rate increases for D.C. residents and assistance for low-income D.C. ratepayers.”
Prior to the Friday rejection, Exelon president and CEO Chris Crane said, “We’re prepared to deliver the benefits of our original merger settlement or to accept all of the terms the Commission concluded would place the merger in the public interest.”
After the rejection, an Exelon spokesperson said, “We hope the Public Service Commission will find a solution that secures all of the benefits for the District and Pepco’s customers and urge it to consider the alternatives we have outlined to approve the merger.”
Image: Washington DC via Shutterstock
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