Exelon in talks with DC mayor on merger settlement
- Pepco Holdings and Exelon Corp. have filed a petition for reconsideration with the District of Columbia's Public Service Commission (PSC), and are working with the mayor's office on a potential settlement to allow their merger to move forward.
- Though the city's utility regulators rejected the deal last month, company officials say they remain commited to the merger and are working to address D.C.'s concerns. Mayor Muriel Bowser's (D) office released a statement yesterday confirming it is "engaged in substantive discussions" with the companies, working on a settlement agreement that could lead to a new application.
- In August, the D.C. PSC turned back the merger that would have created America's biggest utility, saying it was concerned about an "inherent conflict of interest" between Exelon's business model as a generation owner that could prevent the company from "moving forward to embrace a cleaner and greener environment."
- Any settlement between the city and Exelon would still need to be approved by the PSC.
Exelon is refusing to give up on its proposed acquisition of Pepco Holdings, with company officials saying they continue to try and convince city leaders that the deal is a good one for D.C.'s residents.
“We remain convinced our merger offers significant benefits to customers and the District, and we continue working to complete it,” Exelon President and CEO Chris Crane said in a statement after his company filed for reconsideration of their merger. “Since the Public Service Commission explained why it didn’t approve the merger last month, we’ve worked to learn what’s most important to the District – and we are responding.”
City regulators denied the merger in August, saying Exelon's generation mix — including a fleet of aging nuclear plants it is struggling to keep afloat — did not appear in line with Washington's goal to add more renewable and distributed energy. The PSC also indicated it had concerns about regulating a larger utility based outside the District and the financial risk for ratepayers in Exelon's generation portfolio.
But since then, Exelon has mounted a public relations offensive in the District, enlisting well-liked former Mayor Anthony Williams to publicly call for Bowser, a former political mentee, to support the merger and cooperate with the Chicago-based company.
Yesterday, Bowser's office issued a statement saying the city is working with both companies and a settlement could be in the cards.
“We are engaged in substantive discussions with the companies on a settlement agreement that would address, in a new application, the Administration’s concerns," said City Administrator Rashad Young. "Any settlement agreement would be presented to the PSC for review, public comment and final determination. The District deserves a healthy public utility that serves residents and ratepayers in a cost effective, dependable and environmentally sound manner.”
In an effort to bolster support for the deal, the companies earlier this month released a broad list of community organizations and businesses that were backing the merger. They included the DC Chamber of Commerce, Children’s National Medical Center and the American Heart Association.
But the District has also been home to the stiffest resident opposition to the multi-state merger, which was approved in Virginia, New Jersey, Delaware and Maryland. Power DC, a coalition of anti-merger groups in the city, released a statement pointing out that six of the 13 city councilmembers oppose the merger, along with 27 of the 40 neighborhood governments, while none have announced they publicly support it.
- Baltimore Business Journal Exelon to refile bid to acquire Pepco
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