On March 23, the Public Service Commission voted 2-1 in favor of the Exelon-Pepco merger, creating the largest utility company in the country. Chairman Betty Ann Kane cast the lone dissenting vote. The $6.8 billion transaction is official, with Maryland, Delaware, New Jersey, the Federal Energy Regulatory Commission, and the U.S. Justice Department supporting it.
D.C. Mayor Muriel Bowser (D), who previously blocked the merger in an effort to negotiate more favorable terms, issued a terse statement, after the vote. “It appears the Public Service Commission favors government and commercial ratepayers over D.C. residents,” she said. “Instead of a three-year rate increase reprieve we negotiated, it appears that D.C. residents will be hit with a rate increase as soon as this summer.”
While members of the D.C. Council declined to vote on the merger, members Mary Cheh (D-Ward 3), Charles Allen (D-Ward 6) and Elissa Silverman (I-At Large) voiced their opposition to the merger on Twitter.
Sandra Mattavous-Frye, the District’s People’s Counsel, said the merger “appears to be a blow to District residents and the parties to the original settlement agreement.” The first settlement agreement, negotiated by Exelon and Pepco officials with the Bowser administration, included amenities like a one-time $50 credit on the utility bills, relocating some of Exelon headquarters to the District, no rate increase until 2019, and 100 union jobs in the city.
However, earlier this year the commission rejected the settlement agreement. Nevertheless, Matavous-Frye said she will do her job and protect District consumers. “Despite the commission’s perplexing approval of a proposal that and most of the other settling parties rejected, the Office of the People’s Counsel is fully prepared to continue to aggressively advocate for ratepayers and fight to ensure that rates remain affordable for consumers, particularly for our most economically vulnerable residents,” she said.
Power DC, an umbrella organization of progressive environmental, civil rights and citizen rights groups, has been a major opponent of the merger and said “the fight is not over.”
“Our organizations and the citizens we represent will fight Exelon every step of the way to ensure that D.C and the region do not suffer the same fate as Exelon’s other customers,” a statement on Power DC’s web site said.
Power DC has consistently pointed to Exelon’s acquisition of Baltimore Gas and Electric as an example. When Exelon acquired the Baltimore power company, residents in that city noticed an immediate rise in rates despite promises by Exelon not to do so immediately.
“We join together as one company to play a vital role as a leader in our industry and the mid-Atlantic region,” Chris Crane, chief executive officer of the Chicago-based Exelon, said. “We’ve made a number of commitments to customers in all of the Pepco Holding utilities’ jurisdictions-the District, Maryland, Delaware, and New Jersey, and we look forward to getting to work to deliver those benefits to our customers.”
Those benefits include a $72.8 million Customer Investment Fund, including $25.6 million in rate based credits; $11.25 million in funds for energy efficiency and energy conservation program especially for low-income residents, and $21.55 million to promote the District’s sustainability agenda through pilot projects to modernize the electric grid to accommodate more distributed energy resources.
Chris Stukes is a political activist in Ward 8 and is nervous about the merger. He told the AFRO while the merged company will provide some benefits for residents in his ward; it may not be beneficial for the middle class. “I think that the merger means more rate hikes for citizens and people cannot afford that,” Stukes said. “There is already displacement taking place in this ward and the rate hikes will just turn people away from the city.”
However, others embraced the deal wholly. “We’re happy with the commission’s decision for both residents and employers in D.C.,” said former D.C. Mayor Anthony Williams, executive director of the Federal City Council, a pro-District business advocacy group. “The merger is a win for reliability, financial integrity, sustainability, and corporate responsibility. Lifting the uncertainty around this agreement will benefit the economy and allow us to move forward with a stronger utility partner.”