Dive Brief:

• Earthjustice is suing to block Maryland's approval of Pepco Holdings and Exelon Corp.'s planned merger, arguing that utility regulators did a poor job of considering the deal's potential impacts on the state.
• Separately, the Maryland Office of People’s Counsel (OPC) has also filed an appeal, saying that the combination of the two utilities would place too much market power in one company's hands.
• After Maryland approved the merger last month, $6.8 billion merger that would create the nation's biggest utility now just waits on regulators from the District of Columbia to weigh in, where the deal has faced some of its stiffest opposition.

Dive Insight:

Dozens of conditions the Maryland Public Service Commission placed on its approval of the Pepco-Exelon deal were not enough to satisfy environmental or ratepayer advocates. Earthjustice, on behalf of the Sierra Club, filed an appear on June 11, as did the state agency charged with representing utility consumers.

“The majority decision to approve this transaction was flawed, and failed to address the single most important aspect of the law – First, do no harm,” People’s Counsel Paula Carmody said in a statement. “Given the importance of this negative decision to customers and to the future regulation of utilities in Maryland, I am compelled to seek the court’s review of this order.”

The deal, if approved, would combine Exelon’s three electric and gas utilities — BGE, ComEd and PECO — and Pepco Holdings’ three electric and gas utilities – Atlantic City Electric, Delmarva Power and Pepco. The result would be the largest utility company in the country, and according to Carmody it would concentrate control of operations for 80% of Maryland's residential customers in the hands of one corporation.

OPC filed its petition for review in the Circuit Court of Queen Anne’s County, one of the counties served by Delmarva Power .

The Maryland order included conditions calling for higher reliability standards, a $100 rate credit for Delmarva and Pepco residential customers and $43.2 million for energy efficiency programs in Prince George’s and Montgomery Counties and the Delmarva Maryland service territory.

Another condition on the deal requires Delmarva and Pepco to meet aggressive reliability performance standards from 2016 through 2020.

Delaware regulators most recently approved the deal, along with New Jersey, Virginia and FERC. Regulators in the District of Columbia are the last holdouts, but popular sentiment against the merger has been strongest there. More than half of D.C. neighborhood government associations have announced opposition to the merger, as well as six of 13 members of the D.C. Council, the city's legislative body.

Some activists have called for the city to establish a public utility if the Exelon-Pepco deal goes through and city lawmakers included a study on the impacts of a such a move in its recent budget proposal, expected to pass this month.