The Maryland Public Service Commission has given its approval to a proposed merger between Exelon and Pepco Holdings Inc., but attached conditions to the deal.
In a 3-2 decision, the commission approved the $6.83 billion merger but imposed nearly four dozen separate conditions, including higher reliability standards for areas served by Delmarva Power and Light and the Washington DC suburbs served by Pepco; a $100 rate credit for customers in both of those areas; and $43.2 million in energy efficiency programs in the Montgomery and Prince George’s County areas and Delmarva service area in Maryland.
In approving the merger, PSC members said they found the deal to be in the public interest.
“We are pleased that the Maryland Public Service Commission has approved our merger,” said Paul Adams, an Exelon spokesman. “However, the Commission’s order modifies a number of the proposed conditions and we must carefully review it in its entirety. Our proposal delivers significant economic benefits to Maryland customers, increases reliability, promotes energy efficiency and advances clean energy as part of a long-term commitment to improve service and modernize our grid. We will have more to say once we have time to study the order.”
Opponents of the merger disagreed.
“Today is a bad day for consumers, and a great day for monopolies,” said Attorney General Brian Frosh in a statement. “Ratepayers will be paying the nearly $1 billion price tag for improving electric system reliability for decades to come. While a narrow majority of the commission ignored these concerns, the risks and dangers were well-recognized by the two commissioners who wrote a detailed 52-page dissent.
“The Office of the Attorney General, which offered substantial evidence on the nature and scope of these harms, is deeply troubled by this decision and is exploring all options to protect the interests of Maryland consumers.”
In a statement, Emily Scarr, director of the Maryland Public Interest Research Group, expressed disappointment in the decision
“As the voice of Maryland’s electricity consumers, the Maryland Public Service Commission failed us today by approving this deal instead of standing up for rate-paying families and businesses,” Scarr said.
Scarr and other critics worry that the deal would give Exelon too much control in Maryland by making one company responsible for providing power to 85 percent of the state’s residents.
“This virtual monopoly is counter to the competitive marketplace and will put rate paying families and businesses at risk of rate hikes and poor service,” Scarr said.
The merger still requires approvals from the Public Service Commission of the District of Columbia and the Delaware Public Service Commission. Exelon and Pepco hope to complete the deal later this year.