A $6.8 billion merger between Chicago-based utility giant Exelon and Pepco Holdings could be in jeopardy after a Washington, D.C. regulator voted against the deal Tuesday, saying their proposal wasn't in the public interest.
If Exelon and Pepco – which owns Delmarva Power – join forces, it would create the largest Mid Atlantic gas and electric utility, serving about 10 million customers and collecting from a $26 billion rate base.
Regulators in Delaware, Pennsylvania, Maryland and New Jersey had already approved the deal before the Washington, D.C. Public Service Commission said “no.” The two companies had hoped to finalize the agreement by the fall of this year.
In the First State, the merger would bring a one-time credit payment to Delmarva Power ratepayers, as well as additional infrastructure investments, according to state Public Advocate Dave Bonar.
“There would be additional reliability efforts that would’ve been made by the company, and we felt overall, what Exelon brought to the table was a very fair and equitable solution,” Bonar said.
Not only that, but he says it may have been a boon to business interests as well as residential customers.
“If Exelon were to come into this area and be the primary negotiating transmission owner, I think it would make it a little easier to help protect some of our commercial and large industrial customers.”
But opponents, like Rep. John Kowalko, say the merger would create a larger company that would’ve been less responsive to customers’ needs.
“I’m not anti-corporation. What I am is anti-conglomerate and anti-monopoly and I think that this gets very close to that," Kowalko said.
Bonar notes if Exelon and Pepco decide to renegotiate terms of the deal, he says his team would take a tougher stance to possibly get more from a new agreement.
The companies issued a joint statement, saying they were “disappointed” with the decision and that they will review their options.
