Exelon’s planned $6.8 billion purchase of the Washington area’s Pepco electric utility hit a new barrier Tuesday from key supporter D.C. Mayor Muriel Bowser.
Bowser, once a staunch supporter of the deal after she reached a deal with the power companies, came out Tuesday opposing the requirements the city’s public utility commission handed the utilities last week.
The commission spelled out the problems with the plan the utilities offered and gave them 14 days to respond to their concerns.
Bowser had worked with the companies previously to negotiate years of low rates for D.C. residents, with millions of dollars in guaranteed investment in the city’s infrastructure.
“We pulled everyone together to negotiate an agreement that was a great deal for D.C. residents,” Bowser said Tuesday. But the Public Service Commission’s “counterproposal guts much-needed protections against rate increases for D.C. residents and assistance for low-income DC rate payers. That is not a deal that I can support.”
The mayor’s statement came shortly after Washington’s attorney general said the commission’s terms “eviscerate” any benefits to the city’s residents.
Washington is the last step in making Pepco part of Exelon’s Mid-Atlantic footprint. All of the other states’ regulators have signed off on the deal, including Maryland.
The D.C. commission rejected the merger deal in a 2-1 decision on Friday. The commission spelled out four areas where the current merger agreement is lacking, and where improvements are needed for the regulators to consider approval. The utilities have less than two weeks to respond to the commission’s stipulations for the deal to move ahead.
It is not clear how Bowser’s rejection of the commission’s stipulations will play into reaching an agreement.
The D.C. commission’s decision said the companies must provide a more “persuasive rationale” for how they would fund a $25.6 million Customer Investment Fund. Second, Pepco would have to change an arrangement with Exelon on building four advanced grid improvements that the commission says would undermine competition and are inconsistent with D.C.’s market system.
Third, the proposed funding sources for a low-income family energy assistance program “do not improve Pepco’s distribution system nor advance the commission’s objective to modernize the District’s energy systems and distribution grid.” Fourth, the method proposed to allocate the funds “deprives the commission of the ability to ensure that all of the funds are being used to enhance the distribution system and benefit district ratepayers.”
