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Sandra Mattavour-Frye, Esq, Office of the People’s Counsel District of Columbia. (Twitter Photo)

The massive, hotly-debated $6.8 billion Pepco/Exelon merger is now in the hands of the DC Public Service Commission, (PSC) with exclusive power to approve or reject the merger in July.

Supporters and opponents of the merger, among them Pepco customers, consumer advocates, environmentalists and District elected officials have weighed-in about the impact of the merger–all hoping their opinions will influence the PSC’s decision. This elevated conversation is good. And, in my role as the voice of District utility consumers, I urge DC residents to recognize what’s really at stake here, and consider the pros and the cons of the merger for themselves. In my view, at this point, there are more cons than pros.

The core issue is the District’s public interest standard.  In lay terms, District of Columbia citizens and consumers must not only be unharmed by a merger, they must be better off following the merger than they would be without a merger. In addition, the merger must produce tangible financial benefits for consumers.

Upon review of Exelon’s offer, OPC quickly recognized that Pepco’s promises that the merger would lead to more reliable service and energy efficiency; affordable and stable rates; and jobs for D.C. residents were at best vague and inconclusive.

This proposed acquisition is occurring as renewable, potentially more affordable and environmentally safe energy options are reaching the marketplace.  The District of Columbia has made significant advances in opening its energy market to new energy sources, especially in under-served communities. However, this is a key area where the Exelon proposal is deficient.

Pepco’s two million customers in the District, Maryland, New Jersey and Delaware could also have the role of their local distribution companies vastly diminished, should PHI be consumed by the much larger Exelon. Exelon is primarily focused on selling the energy generated at its own plants.

Nonetheless, as the merger application has proceeded through the litigation process in all four affected jurisdictions, I am encouraged to see that the concepts and conditions OPC identified nearly a year ago remain the litmus test for calculating whether consumers can benefit. OPC strenuously litigated the case before the DC PSC and discussed settlement options with Exelon and Pepco and although the recent Maryland PSC approval is now under appeal, many of the benefits OPC fought for in the District are mirrored in the Maryland settlement. That settlement includes 46 conditions OPC views as positive, including higher reliability standards, a $100 residential consumer rate credit and $43.2 million for energy efficiency programs.  These conditions must be the starting point of any decision by the District of Columbia Public Service Commission as it reviews the record before it.

I submit that the conditions OPC has advocated and advanced throughout this case—improved reliability, a three-year moratorium on rate increases, increased low-income energy assistance, commitments to deploying renewable energy options and creating good, green jobs for District residents–are the basis for a solid decision in the public interest.

This case represents a sea change. It is the most significant utility matter in at least a generation; the stakes are even higher than the announced sale price–and regardless of the outcome–it will reframe the landscape for utility consumers for years to come.

The bottom line and overarching premise in the debate should be that the merger must move us forward and not backwards.

Sandra Mattavous-Frye, People’s Counsel for the District of Columbia