Following the recent rejection of their merger from the Public Service Commission, Exelon Corporation and Pepco Holdings filed an alternative proposal March 7. The two companies said the new plan would prevent the loss of more than $78 million in direct benefits for District ratepayers.
The two companies said they will allow the commission to use the funds as it sees fit. “We are prepared to deliver the benefits of the original merger agreement settlement or to accept all of the terms the commission concludes would place the merger in the public interest,” Exelon President and CEO Chris Crane said in a statement. “We have also offered a third option that aims to balance the alternate terms the commission offered in its Feb. 26 order with the views of some of the settling parties on the issue of rate credits to residential customers.”
Exelon and Pepco’s alternative proposal reallocates a portion of the total customer benefits for a $45.6 million fund – $25.6 million would preserve the original merger settlement’s rate credits for residential customers, particularly low-income residents, to offset rate increases through March 2019 and $20 million would be used by the commission for rate credits for residential and commercial customers, additional low-income customer assistance, or grid modernization.
The companies’ alternative retains many elements of the original settlement agreement supported by the Bowser administration such as an immediate $50 credit on District household bills, residential customer accounts that are overdue for two years are forgiven, a commitment to solar and wind energy in the District, $5 million in workforce development programs, a promise to hire more than 100 union workers and provide other jobs in the city, moving part of Exelon corporate headquarters to the District, and $19 million in contributions over 10 years to programs that serve the District’s vulnerable residents.
“The alternative proposal provides flexibility in determining a path forward for the merger, addressing the guidance the commission provided in its order, and the desire to protect District residents, including those in need, from rate increases,” Crane said.
The Exelon-Pepco merger has been approved by the Federal Energy Regulatory Commission as well as the states of Virginia, New Jersey, Maryland, and Delaware. However, in order for the merger to go through, the District’s public service commission must support it.
The companies have asked for a decision by April 7 by the commission on its alternative plan.