Tuesday, March 19, 2019

DC Public Power to Propose Alternative to Exelon-Pepco Merger

[EDITOR’S NOTE: See updated story on D.C. Public Power’s filing Friday.]

By Suzanne Herel

A D.C. advocacy group on Friday will release details of a proposed alternative to the Exelon-Pepco Holdings Inc. merger that it says would provide up to $1 billion in benefits to the district over the next 20 years.

In a Sept. 28 filing with the D.C. Public Service Commission, D.C. Public Power, which advocates energy independence for district ratepayers, said that it planned to seek “an agreement with Exelon to acquire between 51 to 100% of PHI’s D.C.-based assets at an agreed-upon price and terms.”

The nonprofit group called its plan “workable and feasible” and said it would “meet all of the D.C. PSC’s concerns with the proposed merger.”

DCPP said a transaction would occur as soon as possible and would provide “appropriate assurances sufficient to satisfy the D.C. PSC, intervenors and elected officials that the acquisition is in the public interest.”

The group said it had shared its proposal with Exelon and the D.C. government, but had “not yet engaged the cooperation of the merging parties.”

Exelon referred a request for comment to Pepco. A PHI spokeswoman said Thursday that a District-only system would be “expensive and inefficient.”

Myra Oppel, regional communications vice president at PHI, said the group’s proposal “raises many complex legal, financial, regulatory, operational, commercial and customer considerations that the group has not begun to address.”

“PHI and Exelon, along with the District government, the Office of the People’s Counsel, and other parties have filed a proposal with the Public Service Commission of the District of Columbia that is reasonable and achievable and delivers significant benefits to D.C. residents and the community. We believe that it is in the best interests of our customers.”

DCPP plans to outline the details at 10 a.m. at the National Press Club in D.C. A statement announcing the press conference claimed the plan would produce a net present value of $1 billion in benefits over 20 years.

Friday marks the deadline for public comment to be filed with the PSC in response to a request by Exelon and Mayor Muriel Bowser’s administration to reopen the record for the proposed $6.8 billion acquisition of Pepco. As of Thursday afternoon, no comments had been posted. Anya Schoolman, head of solar advocacy group DC SUN, which did not sign on to a new proposed settlement brokered by Bowser, told The Washington Post that her group would be filing comments in opposition on Friday.

The D.C. PSC rejected the proposed deal Aug. 25, saying it was not in the public interest, including its effects on ratepayers, market competition and preservation of natural resources and the environment. (See DC Halts Exelon’s Acquisition of Pepco Holdings; Pepco Stock Tumbles.)

Bowser, who hailed the rejection, entered into negotiations with the companies and several interveners who also had opposed the merger, most notably Attorney General Karl Racine and People’s Counsel Sandra Mattavous-Frye. They released a settlement Oct. 6 designed to assuage the PSC’s concern and convince it to reconsider. (See Mayor’s Settlement Puts DC PSC on the Spot in Exelon-Pepco Deal.)

Among the concessions, Exelon would provide a Customer Investment Fund worth $72.8 million, including $25.6 million to offset the effect of any rate increases over the next four years; one-time funding of various renewable and sustainable energy efforts; and a commitment to buy 100 MW of wind power within PJM. (See Details of Exelon-DC Settlement.)

Exelon, based in Chicago, also would co-headquarter its offices in the district.

An initially approved D.C. Council plan to study the feasibility of turning Potomac Electric Power Co. into a city-owned utility was killed in June after Pepco lobbyists communicated with seven councilmembers or their aides. That majority amended the agreement to reallocate the $250,000 to study “emerging alternatives” for energy and energy efficiency. (See Pepco’s Influence Runs Deep.)

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