Hogan takes no position on proposed utility merger

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Gov. Larry Hogan is taking a neutral stance on the proposed $6.8 billion merger between Exelon and Pepco Holdings, a position that has elicited disappointment from opponents of the deal.

A coalition of environmental and social issues groups are among those who want Hogan  to join with Attorney General Brian E. Frosh and others in opposing the merger, which critics note would make one company responsible for providing power to 85 percent of the state’s residents.

“I would hope that the governor would follow the lead of the attorney general and the people’s counsel,” said Emily Scarr, executive director of the Maryland Public Interest Group. “If I had my druthers,(Hogan) would find that this merger is not in the public interest.”

MaryPIRG is part of a coalition of public interest, environmental and social issues groups that oppose the merger.

Hogan, in an April 13 letter to the state Public Service Commission, which must approve the merger, that he wanted “to be clear about my position.”

“Upon careful review of the proposal and acknowledging the challenges of intervention at this late stage in the process, as well as being respectful of the commission’s independent role, I have determined that my office should neither oppose nor support the current proposal but instead be impartial as the PSC process concludes its thorough determination based on the facts of the case,” Hogan wrote.

In March, Hogan said he would delay the appointments of two new PSC members until the commission ruled on the proposed merger. A spokesman said at the time that the governor wanted to “let it play out without our office having a direct effect over it.”

“It’s fair to say that the governor didn’t think it was fair to weigh in on this in the 11th hour,” Matthew Clark, a Hogan spokesman said.

In 2011, then-Gov. Martin J. O’Malley initially opposed the proposed merger of Exelon and Constellation Energy and used his position to sweeten the proposal for ratepayers in Maryland.

Hogan, in his letter to the commission, expressed concerns about how the deal could potentially affect ratepayers and called on commissioners to approve a deal that ensures a reliable delivery of service as well as “predictable and affordable rates.”

“The governor will want to see an outcome that delivers on those things,” Clark said, adding that it was not clear if extending the time period for making a decision would cause Hogan to weigh in for or against the merger.

Scarr said a delay in a decision by the PSC opens the door for the new Republican governor to have some say in the process. But Scarr doesn’t want Hogan to use any opposition as a bargaining chip.

Scarr said deregulation of utilities in Maryland has created an environment where “there is no path to ever make this a good deal” and that Hogan should take a stand that protects rate payers.

A Hogan spokesman was not immediately available for comment.  An Exelon spokesperson declined comment for this story.

Included in the Exelon-Pepco deal is Pepco, the utility company that serves 500,000 people in the suburbs of Washington, D.C.,;Delmarva Power, which serves 1.4 million people in Delaware and the Eastern Shore of Maryland; and Atlantic City Electric in southern New Jersey.

New Jersey and Virginia regulators have already approved the deal.

The Delaware Public Service Commission announced earlier this month that it would delay a decision until after commissions in Maryland and Washington, D.C. issue their respective determinations.

Last week, Exelon filed an amended settlement agreement in Delaware that replaces a 10-year credit for customers with a one-time credit totaling $40 million as well as guarantees for a study of land-based wind projects and $2 million for low income energy-efficiency programs.

In March, the company announced it had reached agreements in Prince George’s and Montgomery Counties that would cover all of Pepco’s customers in Maryland.

That announcement caused the Maryland commission to re-open the public comment period and delay a decision until possibly May.