The proposed merger of the District’s utility company with an energy giant has generated a lot of discussion among the city’s political leaders and activists.


D.C. Council member Mary Cheh has reservations about Exelon-Pepco merger. (Facebook Photo by Barbara L. Salisbury/For the Office of Mary Cheh )

Pepco Holding, the parent company that offers utility services to District residents and businesses, is in the process of melding with Chicago-based Exelon in a $6.8 billion merger approved on April 30 by the boards of both companies. The combined utility businesses will serve about 10 million customers and have a rate base of approximately $26 billion.

The merger has been approved by utility commissions in Delaware and New Jersey, and in Maryland, Montgomery and Prince George’s counties have given favorable responses to it. Despite promises of efficient service and reasonable utility rates by leaders of the companies and their supporters, there is some skepticism regarding the merger in the District.

“We write on behalf of District residents and ratepayers concerned about potential adverse impacts from . . . the application for approval of Exelon Corporation’s acquisition of Pepco Holdings, Inc.,” said D.C. Council member Mary Cheh (D-Ward 3), in a recent letter to the District of Columbia Public Service Commission. It was co-signed by D.C. Council members Charles Allen (D-Ward 6) and Elissa Silverman (I-At Large).

Cheh is chairman of the Committee on Transportation and the Environment, and held a roundtable on the merger on Jan. 23. Her colleague, D.C. Council member Vincent Orange (D-At Large), who chairs the Committee on Business, Consumer and Regulatory Affairs, held a roundtable on the same topic on Jan. 29.

Cheh said testimonies from the roundtables were troubling. “The concerns raised by the public, the Office of the People’s Counsel, the District government, and environmental groups were deeply troubling,” she said. “It is our belief that the acquisition as proposed is not in the public interest.”

Cheh is concerned the merged company will not be sensitive to rates and policies regarding the District’s power grid and power supply. She also argues that the $33.75 million one-time payment to District customers, which averages out to $128 per ratepayer, is inconsequential.

The council member said if the commission decides to approve the merger, that “legally binding, permanent, and enforceable” agreements on rate increases and customer service should be gotten from Exelon executives and “not simply commitments or statements.”

The public service commission makes the final decision for the District on the merger. D.C. Mayor Muriel Bowser (D) and members of the D.C. Council have no formal role in the process. A spokeswoman for the public service commission said a merger decision will be made 90 days after evidentiary hearings, which are taking place presently, are completed.

Bowser told the AFRO on April 1 that the District’s Department of the Environment will look into the merger, and that she is requesting the public service commission “look hard at Exelon’s proposal.”

D.C. Council Chairman Phil Mendelson (D) said he owns Pepco stock, and has recused himself from issues regarding the merger. Orange, a former Pepco regional vice president, wouldn’t comment on the transaction.

D.C. Council member Anita Bonds (D-At Large) said the merger “is not a council issue.” “We don’t make a decision,” Bonds said,” but we want fair rates for our residents.”

D.C. Council member Yvette Alexander (D-Ward 7) agreed with Bonds that the council is not directly involved but she does have concerns. “I want to make sure that our customers have affordable and fair rates regarding their utility bills,” she said. “Residents should have reliability of rates.”

Alexander said that she wants the city’s undergrounding of utilities program to continue if the merger is done.