Dive Brief:

• The Washington, D.C. Office of People's Counsel (OPC) has filed a petition in the D.C. Court of Appeals to overturn the city Public Serive Commission's decision to approve the acquisition of local utility Pepco Holdings Inc. by Exelon Corp. 
• The OPC said it filed the appeal to address "a number of procedural weaknesses" in the regulatory process. Regulators twice rejected merger bids from Exelon, setting up a complex process of dealmaking and regulatory revisions leading up to the March 23 approval.
• Regulators have said their process was sound, but the deal attracted more scrutiny from the ratepayer advocate after Exelon proposed a 5.25% rate increase in late June. OPC said it would oppose that request as it fights the merger on appeal. 

Dive Insight:

Sandra Mattavous-Frye and her Washington Office of People's Counsel have seen every side of the Exelon merger — some more than once. 

OPC opposed Exelon's original proposal to buy Pepco back in 2014, saying the Chicago-based company did not promise enough benefits for residential ratepayers in its bid to D.C. regulators. 

After the PSC rejected that plan, Exelon hammered out a settlement agreement with Mayor Muriel Bowser (D) and other merger stakeholders. That plan more than financial benefits for residential consumers — which OPC represents — by more than five times. Mattavous-Frye signed on to support it. 

But regulators balked at that settlement as well, concerned it would not ensure fair competition among vendors and responsible application of funding for certain low-income and environmental programs. Regulators offered a series of recommendations for the companies final proposal, which they approved March 23.  

In that complex process, however, some provisions that guaranteed financial benefits for residential ratepayers were removed, with allocation to be decided in later rate cases. Without them, Mattavous-Frye and OPC said the merger would not be in the public interest, and on Aug. 12 the office sued to have it overturned. 

“OPC is appealing the PSC’s order because it has a number of procedural weaknesses that must be addressed by the D.C. Court of Appeals,” Mattavous-Frye said in a statement. “Judicial review is critical not only because the decision impacts this case, but all cases going forward in terms of the process and procedures the Commission uses in making its decisions. It concerns the amount of process, or lack thereof, afforded to all parties; and the manner in which settlements are decided.”   

Directly after the ruling, two members of the D.C. PSC told Utility Dive that while the merger approval process was unconventional, it followed the legal standards for the commission.

Critics say their worries about the merger are materializing. Exelon included a $50 residential rate credit for customers directly after the deal, but has since asked for a 5.25% rate increase for those customers. OPC said it would fight against that as well. 

“My staunch commitment from the beginning of this case to today to ensure that District consumers receive maximum benefits from the merger dictates that OPC exhaust all reasonable remedies and not let bygones be bygones,” said Mattavous-Frye. “At the same time, OPC will actively litigate and oppose Pepco’s $85 Million rate increase request.”

The agency said it wil file briefs detailing its basis for appeal and a full explanation of remedies sought in the coming weeks.