The D.C. Public Service Commission (PSC) approved a proposed $6.8 billion merger agreement between Chicago based nuclear giant Exelon and the D.C. utility Pepco Holdings, despite a two year battle with city regulators and losing the mayor’s support of the plan.
Final approval of the planned merger now rests in the hands of Exelon. Federal regulators previously approved the merger, which creates a utility behemoth, the largest in the country, serving roughly 10 million customers. Virginia, Maryland, Delaware and New Jersey regulators all previously approved the merger, with the PSC being the last holdout, reports Washington Business Journal.
Exelon is downplaying the seemingly positive news, dissuading any celebration until its board can thoroughly review the PSC approved proposal. (RELATED: Pepco-Exelon Merger Remains Alive, Despite Losing Mayor’s Support)
“We must carefully review the Commission’s order,” Exelon spokesman Paul Adams said following the PSC’s Wednesday vote. “Once we have had a chance to do so, we will have more to say about what it means and our next steps.”
Regulators approved the proposed version of the merger with a 2-1 vote. The news sent Pepco shares on an upward run, gaining 27 percent after the news of the favorable vote broke. Commission Chair Betty Ann Kane was the lone voice of dissent, arguing the bill guts consumer protections to energy rate increase, reports WTOP.
“Expensive wedding gifts are nice,” Kane said Wednesday. “But all the wedding gifts in the world can’t make a bad marriage good.”
The approved merger proposal does away with protections for residents against unexpected rate hikes through 2019, instead allocating $25.6 million to the PSC to use to protect consumers from rate hikes how they see fit. This change prompted Mayor Muriel Bowser to drop her support for the merger, despite spearheading last fall’s effort to force the PSC to reconsider the deal. In August the PSC unanimously opposed the merger, and were only considering it Wednesday thanks to the efforts of Bowser to keep the merger alive.
“The Public Service Commission rejected an agreement that had the support of the Peoples Counsel, Attorney General, DC Water and others,” Bowser said in a press release. “The PSC’s counterproposal guts much needed protections against rate increases for DC residents and assistance for low-income DC rate payers. That is not a deal that I can support.”
The PSC voted to bypass the mayor on the merger, meaning Bowser’s final approval is not needed for the proposal to move forward.
Additional information on the potential historic merger will be available after officials at Exelon review the approved agreement from PSC.
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