After nearly two years of hearings up and down the mid-Atlantic region, the proposed Exelon-Pepco merger faced a critical vote the District of Columbia Public Service Commission.
In a meeting on Friday, the PSC voted 2-1 to reject a settlement agreement on the merger as proposed by the two companies. The regulators left the door open to approval, however, outlining changes to the settlement deal that would lead to its approval. The companies have 14 days to respond. More information on that decision is available here.
The D.C. PSC is the final hurdle left for the companies to clear in the merger approval process. Federal energy regulators, as well as state regulators in New Jersey, Virginia, Maryland and Delaware, have already approved the proposed $6.8 billion deal.
Regulators in the District, however, rejected an initial merger proposal in August 2015, citing an "inherent conflict of interest" between the company's business model and the city's clean energy goals. Soon after, Exelon hammered out a settlement deal with Mayor Muriel Bowser and a group of merger intervenors, hoping to persuade regulators to approve the deal on appeal.
The merger is of critical importance to Exelon, which has sought the predictable income of Pepco's regulated utilities to hedge against the risks in its nuclear plant fleet, which is the largest in the nation but is running on the verge of unprofitability in PJM markets.
Since the announcement was first made in April 2014, the merger has inspired controversy, especially in the nation's capital, where it has faced its stiffest opposition. As the power sector awaits the next chapter of the merger saga, here's a reminder of how we got to this point:
Exelon announces plans to buy Pepco Holdings for $6.8 billion.
| Nov. 20, 2014FERC approves the Pepco acquisition.
| Dec. 10, 2014Maryland PSC staff urges conditions on the merger, citing concerns about the size of the resulting company and its economic benefit forecasts.
| Dec. 20, 2014D.C. residents begin organizing against the merger, forming the group Power D.C. in response to concerns over Exelon's size and record on renewables and DERs.
| Jan. 20, 2015As proceedings at the the D.C. PSC heat up, Utility Dive publishes its first full-length investigation into the merger's potential benefits and costs.
| Feb. 9, 2015A poll conducted for merger opponents finds that 6% of D.C. residents support the merger. Exelon calls the poll "fundamentally flawed."
| Feb. 11, 2015New Jersey regulators approve Exelon-Pepco merger after a settlement is reached to boost rate credits for Atlantic City Electric, a Pepco subsidiary.
| Feb. 18, 2015Exelon reaches a settlement with merger stakeholders in Delaware widely expected to result in regulatory approval for the Pepco acquisition. Soon after, the company doubles merger incentives for D.C. residents.
| March 5, 2015The Maryland Attorney General files a strongly-worded brief with regulators in the state, urging them to reject the merger he says "offers no tangible, incremental benefits" to ratepayers.
| March 24, 2015Maryland regulators delay a decision on the merger for a second time after Exelon strikes a settlement with crucial counties in the state.
| April 10, 2015Three D.C. Council members and nearly half of D.C. neighborhood governments announce their opposition to the merger days after Exelon CEO Chris Crane testifies on the deal before District regulators. None come out in favor.
| May 15, 2015Maryland regulators approve Exelon-Pepco merger in a 3-2 vote, adding more than 40 conditions on the deal including enhanced bill credits and higher efficiency standards.
| May 19, 2015Delaware regulators approve the Pepco acquisition after Exelon updated merger conditions the month before, leaving D.C. as the sole jurisdiction to weigh in on the merger.
| May 31, 2015The D.C. Attorney General announces his opposition to the deal days after the D.C. Council passes a budget that funds a study of public utility ownership as an alternative to the merger. Later in June, Maryland merger critics appeal approval of the deal.
| Aug. 25, 2015D.C. regulators reject the Pepco acquisition, citing an "inherent conflict of interest" between Exelon's generation-owning business model and the District's clean energy goals.
| Sept. 2015Exelon announces it will seek approval for its merger on appeal and begins talks with D.C. Mayor Muriel Bowser and merger intervenors on a settlement deal.
| Oct. 2, 2015Utility Dive breaks the news that Exelon has struck a settlement deal with Mayor Bowser's office. Days later, the mayor announces the deal alongside the Exelon CEO, saying the settlement will benefit District residents.
| Oct. 28, 2015The D.C. PSC votes to consider the merger settlement after Exelon threatens to walk away from the deal if there are further delays. Utility Dive reveals that seven of the 13 D.C. Council members sent a letter to regulators earlier in the month urging approval of the settlement.
| Nov. 12, 2015Merger opponents seek an investigation of Mayor Bowser, targeting the timing of Pepco's $25 million in contributions to a stadium project and questioning whether it or Exelon donated to a pro-Bowser political action committee.
| Dec. 2, 2015District regulators kick off a second round of hearings on the merger.
| Dec. 18, 2015After missing an earlier filing deadline, the General Services Administration — the power purchaser for the federal government — files testimony with regulators urging rejection of the settlement deal. New reporting reveals that Exelon paid the head of the pro-Bowser PAC to lobby the mayor on the deal.
| Feb. 25, 2016After the conclusion of hearings, the PSC announces an open meeting will be held on Friday, Feb. 26 to decide the fate of the merger.
| Feb. 26, 2016D.C. regulators reject the merger settlement, but give the companies 14 days to respond to a series of changes to the deal that would result in its approval.
| March 1, 2016The D.C. Mayor and ratepayer advocate reject the conditions laid out by the PSC, putting the deal at risk.
| March 7, 2016Exelon and Pepco file another version of their merger proposal, aiming to answer the mayor's concerns and save the deal.
| March 11, 2016The ratepayer advocate rejects the terms of Exelon's latest merger proposal, setting the stage for a merger decision on March 23.
| March 23, 2016D.C. regulators approve Exelon's merger proposal on the merits in a 2-1 vote.
