Dive Brief:
- District of Columbia Mayor Muriel Bowser (D) announced Tuesday she opposes new conditions on the Exelon-Pepco merger settlement outlined by regulators in the city last week.
- Last week, the D.C. Public Service Commission rejected a settlement deal struck by the companies, the mayor's office and other merger stakeholders, but outlined four new conditions for the deal that would result in automatic approval if adopted by the parties. The PSC order, according to the mayor, "guts much needed protections against rate increases for D.C. residents and assistance for low-income D.C. ratepayers."
- The statement from Bowser comes hours after the D.C. People's Counsel — the residential ratepayer advocate in the District — also announced her opposition to the deal. Without approval of the conditions by all parties to the settlement, the merger cannot be automatically approved, though Exelon and Pepco may offer new options for customer relief within 14 days of the PSC's Feb. 26 decision.
Dive Insight:
While many in the power sector expected the PSC to end the nearly two-year saga over the Exelon-Pepco merger last Friday, the regulators instead extended the debate.
On Feb. 26, the regulators rejected a merger settlement struck in October. In doing so, they outlined four areas of concern, including that commercial and industrial ratepayers were shut out of a $25.6 million contribution to a customer investment fund (CIF) to be set up by Exelon as a part of the merger deal.
Under the settlement, those funds were supposed to go toward providing relief from rate incresaes for residential customers for about five years. But with the new conditions, the $26.5 million would be allocated during Pepco's next rate case, which the PSC oversees.
While those funds could still be applied to residential rate relief in that case, they could also be used elsewhere, and that drew the ire of both the mayor and ratepayer advocate.
"The Public Service Commission rejected an agreement that had the support of the People's Counsel, Attorney General, DC Water and others," Bowser said in a Tuesday statement. "The PSC's counterproposal guts much needed protections against rate increases for D.C. residents and assistance for low-income D.C. ratepayers. That is not a deal that I can support.”
All parties to the merger settlement have 14 days from the date of the decision to either support the new conditions on the deal or file alternatives with the PSC. After that period, parties have seven days to reply.
The OPC and mayor's office are the first to announce their positions on the settlement conditions, and Pepco had no comment on either statement. Exelon spokesperson Paul Adams said in an email that that Exelon continues to have conversations "with the D.C. government and other settling parties about the Commission’s order and the new provisions."
"The discussions are ongoing, and we will provide an update at the appropriate time," Adams wrote.
For more information on the merger, check out our feature on the PSC decision and this timeline on the merger saga.
