DC government, activists join appeal of Exelon-Pepco merger

Dive Brief:

  • Four parties, including the District of Columbia city government, have now challenged the Exelon-Pepco merger before the D.C. Court of Appeals. Exelon's acquisition of the mid-Atlantic utility was sealed when the D.C. Public Service Commission approved it in March after a lengthy and contentious consideration.
  • Public Citizen and D.C. Solar United Neighborhoods (SUN) filed jointly, arguing the mega merger is not in the public interest, along with other procedural issues. The city government of the District of Columbia has also filed, as has the Washington, D.C. Office of People's Counsel.
  • Groups argue the commission did not give enough notice of certain hearings and that the convoluted merger approval process did not follow the legal guidelines for the PSC. Regulators have defended their decision, saying the process was legal and open. 

​Dive Insight:

Opponents of the Exelon-Pepco merger were always expected to challenge the deal, but a proposed 5.25% rate increase will likely give them more fodder.

Just months after the D.C. Public Service Commission signed off on the deal, Pepco announced it would need to boost its revenue.

“We predicted that the merger would be bad for ratepayers, and indeed, while the ink is barely even dry on the deal, Pepco is pushing for a record-breaking rate increase,” David Arkush, managing director of Public Citizen’s Climate Program, said in a statement

Public Citizen and DC SUN say city regulators gave too little notice of hearings  — 12 days instead of the required 45 days — and then reversed course on its decision without adequately explaining the reasoning. In addition to procedural points, the groups said the merger is not in the public interest.

Two months ago the PSC rejected requests by the city, Public Citizen and other groups to reconsider its approval of the merger. Subsequently, Pepco submitted its $85.5 million rate increase.

The District of Columbia government also filed for rehearing, , according to a letter provided to Utility Dive, a move Attorney General Karl Racine began considering in June. The city contends it was denied due process when a rehearing was rejected, and that regulators failed to fully explain why they changed their opinion related to a nonunanimous settlement agreement struck with the city after regulators rejected an initial merger application.

“My office has a mandate to act in the public interest of District residents, and the merger currently approved by the Public Service Commission between Pepco and Exelon does not meet this critical standard," Racine wrote in June. "The only plan that sufficiently protects residential, including low-income, ratepayers is the [nonunanimous settlement] originally approved last fall by our office, the People’s Counsel and the Mayor’s office."

The D.C. Office of People's Counsel, which has also filed a petition to overturn the merger, has said it will fight the rate increase as well

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