Exelon-Pepco Merger Challenged in Court

August 26, 2016—The Exelon-Pepco merger is still facing opposition in Washington D.C. The District’s Public Service Commission (PSC) approved the merger in March but was asked to reconsider it by the D.C. Office of People’s Counsel (OPC) and Office of Attorney General (OAG). The request was denied in June, and the two agencies recently announced they are taking the PSC to court to try and have the merger overturned.

Before approving the merger, the PSC rejected it. When the rehearing application filed by the OPC and OAG was denied in June, Attorney General Karl Racine stated that the city would once again be challenging the merger, since regulators had failed to fully explain why they changed their opinion on the merger, which had originally been unanimously opposed.

The OAG expressed its concern with the merger approved by the PSC in June, stating that, “[the] office has a mandate to act in the public interest of District residents, and the merger currently approved by the [PSC] between Pepco and Exelon does not meet this critical standard.” The reason for this concern was the PSC’s decision to allow Exelon to drop the credits for ratepayers, which were included in the original proposed settlement, which would have insulated them from increased prices through 2019. Mayor Muriel Bowser, a lead architect of the settlement offered to Exelon and Pepco in October 2015, said that she could not support the PSC's approved plan, because it "guts much needed protections against rate increases for D.C. residents and assistance for low-income D.C. ratepayers."

Other critics of the merger, including Public Citizen and D.C. Solar United Neighborhoods (SUN), worried it would lead to higher electricity rates. After the PSC rejected the previous attempt to get it to reconsider the merger in June, Pepco asked for an $85.5 million rate increase.

As a result, Public Citizen and D.C. SUN are also litigants in the lawsuit against the merger that was filed with D.C. Court of Appeals. According to their press release, both “believe the merger is not in the public interest and the petition…is the first step in asking the D.C. Court of Appeals, the District’s highest court, to block the merger.”

To read more about how the Exelon-Pepco merger fared in other states, please see this article in the Clearinghouse's June 2015 newsletter.

Sources: Media Sources, DCPSC, LIHEAP Clearinghouse