Latest: On April 22, 2016, Public Citizen, the D.C. attorney general and the District's chief consumer advocate launched a challenge to Exelon's takeover of Pepco.
View: Public Citizen's Challenge to the Exelon-Pepco Merger.
In April 2014, electricity behemoth Exelon, announced a $6.9 billion deal to acquire Pepco, the distributional utility for all of D.C. and parts of Maryland, Delaware and New Jersey.
On March 23, 2016, Exelon and Pepco were granted their final approval from the D.C. Public Service Commission (PSC). Intervening parties are asking the PSC to reconsider their decision.
Public Citizen opposes Exelon’s takeover of Pepco and has worked with local groups in Maryland and Washington, D.C. to stop the merger. The acquisition gives Exelon a near monopoly in the region and could mean higher prices and lower quality of service for consumers.
What’s at Stake
Exelon, which dominates the regional power market where Pepco must purchase electricity for its customers, has seen declining profits from its aging nuclear power plants. The purchase of Pepco is a way for Exelon to transfer the risk that its shareholders currently face from this volatile power market and onto Pepco’s 2 million captive ratepayers. As a result, household consumers are threatened by higher utility bills under the merger.
In addition, the merger comes at a time when climate disruption is driving the need to shift to clean and affordable energy sources. But Exelon aggressively opposes efforts to increase our reliance on clean energy. Learn More.
And if this deal goes through, Exelon won’t be just the biggest utility in the region, but the biggest utility in America. Being the largest utility in the country means Exelon will wield increasing political power - a disturbing notion for an energy corporation bent on squashing renewable energy. Learn More.
Only one state in Pepco’s service territory needs to reject Exelon’s proposal to stop the merger. On May 15, 2015 the Maryland Public Service Commission approved the acquisition on a 3-2 vote.
On August 25, the D.C. Public Service Commission (PSC) unanimously rejected the takeover because it failed to meet the public interest standard, posed potential harm to District ratepayers and offered inadequate and unsubstantiated benefits to the District.
On October 6, after weeks of backroom negotiations, D.C. Mayor Muriel Bowser and Exelon announced that they had reached a settlement that would revive the failed takeover - and asked the D.C. PSC to expedite the review of the negotiated deal.
On February 26, 2016 the PSC rejected the settlement, but proposed alternative terms that, if agreed to by all settling parties, would close the deal. These new terms were rejected by the mayor and the District’s chief consumer advocate.
In a shocking move, on March 23, the PSC approved the acquisition without the unanimous approval of the settling parties. D.C. was the final approval needed by Exelon to move forward with the takeover.
Thousands of residents from across the region filed comments in opposition to the takeover. Hundreds of residents in Maryland and the District voiced their opposition at public hearings held on the proposed merger throughout 2014 and 2015. The Maryland attorney general, the Maryland Office of People’s Counsel, the Montgomery County Council and 41 environmental, public interest and other groups called on regulators to reject the deal.
Opposition to the takeover (PDF) also includes four D.C. Councilmembers, the D.C. Office of People’s Counsel and 27 District advisory neighborhood commissions.
On November 11, 2015 Public Citizen and its allies held a press event calling for a probe into questions surrounding Mayor Muriel Bowser’s decision to flip-flop on her opposition to the proposed takeover of Pepco by Chicago-based Exelon. Along with the Chesapeake Climate Action Network we have filed a request with the District Board of Ethics and Government Accountability to evaluate the relationship between a $25 million deal between Mayor Bowser and Pepco related to a new soccer stadium project and the Mayor’s decision to withdraw her opposition to Exelon’s bid to take over Pepco to ensure that there was no impropriety, collusion, or unethical conduct of any kind. Public Citizen and the Chesapeake Climate Action Network have also issued a Freedom of Information Act request for all internal correspondence between the mayor’s office, Pepco and Exelon regarding the controversial negotiations.
Public Citizen challenged the merger before the Maryland Public Service Commission (MD PSC) – filing as an intervener to the merger in October 2014 and submitting direct testimony in December 2014.
Public Citizen filed for judicial review of the MD PSC decision based on the apparent conflict of interest between Exelon and then-Commissioner Kelly Speakes-Backman, who cast the deciding vote in favor of Exelon’s purchase. Maryland’s Office of People’s Counsel and the attorney general are both appealing the decision in court.
District of Columbia:
On November 20, 2015, Public Citizen petitioned the PSC to intervene in the settlement proceeding, but was denied intervenor status.
On December, 23, 2015 Public Citizen filed comments on the settlement agreement.
In response to the PSC's approval of Exelon's bid to take over Pepco, Public Citizen filed an application of reconsideration on April 22, 2016: