The District of Columbia rejected Illinois-based Exelon’s $6.6 billion planned purchase of regional power company Pepco on Friday, despite a protracted lobbying campaign and the support of D.C. Mayor Muriel Bowser.
The D.C. Public Service Commission rejected the plan in a 2-1 vote while laying out changes the companies can make to improve their plan and apply for approval again within the next 14 days.
This is the second time the commission has rejected Exelon’s merger bid. Washington is the last jurisdiction that must approve the merger agreement for the Pepco takeover to move forward. Pepco serves D.C., Maryland and other adjacent states.
Most of the problems the commissioners have with the purchase concern support for renewables and investments in upgrades to Washington’s electric grid.
The commission spelled out four areas where the current merger agreement is lacking and where improvements are needed for the regulators to consider approval.
First, the companies didn’t provide a “persuasive rationale” for how to fund a $25.6 million Customer Investment Fund. Second, Exelon would be assigned the role of developing a large solar generation facility, while Pepco would make four advanced grid improvements that the commission says would undermine competition and are inconsistent with the district’s market.
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.”
