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Exelon-Pepco Merger Would Give One Company Too Much Control, Could Raise Electricity Rates for District Residents

Dec. 17, 2014

Exelon-Pepco Merger Would Give One Company Too Much Control, Could Raise Electricity Rates for District Residents

Proposed Merger Not in Public Interest, Public Citizen to Tell Regulators

WASHINGTON, D.C. – A proposed merger of Exelon Corporation and Pepco Holdings Inc. would give Exelon too much control over electricity pricing and delivery, could lead to higher prices and would deal a setback to efforts to boost the use of renewable energy, Public Citizen will tell District regulators at a hearing today.

The hearing is the first of four the commission will convene to receive comments from the public on the merger, which was proposed in April. Public Citizen will testify at the hearing along with environmental, public health, business, faith, low-income and social justice advocates who are part of the Power DC coalition and who oppose the merger. They will hold a press conference at 5:30 p.m. on the 10th floor of 1333 H St. NW– shortly before the hearing begins.

“We urge regulators to pull the plug on this merger,” said Tyson Slocum, director of Public Citizen’s Energy Program. “It’s a bad deal for consumers all around.”

Problems with the merger include:

  • A merger would reduce competition, likely resulting in (PDF) higher prices for consumers, according to a report by the Independent Market Monitor – an independent agency that monitors the regional organization that coordinates the movement of wholesale electricity through the area – filed with the Federal Energy Regulatory Commission.
  • It would be more difficult to increase the use of renewable energy. That’s because Exelon owns power plants and sells power to the wholesale market. Pepco, in contrast, owns no power plants. Instead, it buys power on the wholesale market and sells electricity to its customers. The merger would fundamentally change Pepco’s business model from a neutral supplier of energy to a more captive conduit of Exelon’s power sales. As a result, an Exelon-controlled Pepco likely would discourage consumer-owned energy, like rooftop solar, because it would compete with its power plant-generated electricity—particularly since Exelon has been a leading opponent of incentives for wind and solar energy.

“A merger would shift financial risk away from Exelon’s shareholders and onto Pepco customers,” said Allison Fisher, outreach director for Public Citizen’s Energy Program. “On behalf of our District members, we strongly urge the D.C. Public Service Commission to block this merger, and disconnect these two companies for good.”

The public hearing will be heard in Suite 700 of 1333 H St. NW, Washington, D.C.

Learn more about the merger.