- Exelon Corp. has issued a statement saying it intends to continue pursuing its meger with Pepco Holdings, a week after regulators in the District of Columbia denied the deal.
- Exelon said it believes regulators failed to recognize both immediate and long-term benefits for D.C. residents, including hundreds of millions in savings and improved reliability.
- Observers say the companies have only a few options before them and must move quickly, and also warn it remains doubtful the D.C. Public Service Commission would reverse its decision.
Exelon Corp. has has reaffirmed its commitment to its proposed merger with Pepco Holdings, a week after the District of Columbia Public Service Commission rejected the deal. According to Exelon, it has reviewed the PSC's final order and remains "convinced the decision fails to recognize the substantial immediate and long-term benefits of our merger proposal to citizens, businesses and communities in the District of Columbia."
Regulators in Delaware, Maryland, New Jersey and Virginia previously approved the deal, and Exelon said failing to complete the merger would mean customers in those states would lose out as well.
"Not completing our merger would deny customers in the District of Columbia as well as Delaware, Maryland and New Jersey hundreds of millions of dollars in direct financial benefits, improved reliability and storm response, renewable energy projects, and commitments that will preserve their local utilitys role as a strong community partner and contributor to economic growth," Exelon said. "We want to deliver these benefits to customers and will strive to make that happen."
But the companies will need to move quickly, and even then it remains doubtful if D.C. regulators will change their decision. The company can appeal the decision within 30 days, but experts say the language used in the District's order — which identified an "inherent conflict of interest" between Exelon's business model and the city's clean energy goals — may mean sufficienct changes would trigger a larger review. The companies can also reapply, or take the matter to court, but a win there would remand the decision back to the PSC.
Given the nature of what he called "ideological concerns" from District regulators, UBS Securities analyst Julien Dumoulin-Smith told SNL there is "a real risk that Washington may not relent."
The District rejected the merger unanimously, but approved the specific order rejecting the merger by a vote of 2-1. Commissioner Willie L. Phillips said that he would have preferred if the commission gave the companies more options to revise their application, and indicated he would write a dissent to the order while still voting to reject the merger.