Earlier this month Exelon Corporation agreed to acquire Pepco Holdings, Inc. in an all-cash $6.8 billion transaction and local legislators remain cautiously optimistic about the deal. Sen. Paul Pinsky (D-22) said he is worried Exelon may not be able to address the needs of all of its ratepayers. “Exelon is an international company headquartered in […]
Earlier this month Exelon Corporation agreed to acquire Pepco Holdings, Inc. in an all-cash $6.8 billion transaction and local legislators remain cautiously optimistic about the deal.
Sen. Paul Pinsky (D-22) said he is worried Exelon may not be able to address the needs of all of its ratepayers.
“Exelon is an international company headquartered in Chicago, not Baltimore, and there’s some concern whether they’re going to pay as much attention and sensitivity to the D.C. region which Pepco has serviced in Montgomery and Prince George’s County. Some of their policies have not always been consumer friendly. So it’s a wait and see, at least for me. I think it could be a major shift. People weren’t happy with Pepco for a number of years because they were not responsive. After that outcry the last 18 months, they really did shape up significantly. It may be harder to get the attention of Exelon which is a much larger company. There’s some concern of us getting lost.”
Del. Tawanna Gaines (D-22) said she hopes the commission will be aggressive in ensuring citizens get a good deal.
“I’m hoping that we will get some rate relief,” she said.
Paul Elsberg, a spokesman for Exelon, said the acquisition will be beneficial for ratepayers. Elsberg said he remains confident customers will see better system reliability and storm restoration capability.
“Exelon has also committed $100 million in direct customer benefits upon completion of the transaction—equivalent to cover $50 per Pepco customer,” Elsberg said. “These funds will be used as the Maryland and other public service commissions deem appropriate for customer benefits, such as rate credits, low income assistance and energy efficiency programs.”
Regina Davis, a spokesperson for the Public Service Commission cautioned the deal is far from completion.
The Public Service Commission—which regulates utilities—must approve the sale. Conditions of the sale also hinge on approval by the Federal Energy Regulatory Commission, the District of Columbia Public Service Commission and several other state commissions including the Delaware Public Service Commission and the New Jersey Board of Public Utilities.
“Until something is filed, it’s just speculation as far as we’re concerned,” said Regina Davis, communications director for the Maryland commission. “After (the companies) file we will open a docketed case just as we did with the Constellation merger. We would have a procedural conference to schedule all the milestones–the evidentiary hearing, the comment hearing and so forth.”
Elsberg said he expects the company to begin its regulatory filings in June. After Exelon files, the commission will have 225 days or seven-and-a-half months to render a decision.
Scott Peterson, a spokesperson for County Executive Rushern Baker III, said, the county is paying attention to the proceedings and how the acquisition will affect county residents.
“County Executive (Baker) wants to ensure that high quality service and competitive prices will not be impacted on county ratepayers,” Peterson said. “He is looking for benefits from unified ownership of the region without sacrificing competition or opening ratepayers to unexpected rate increases.”
In neighboring Montgomery County, Councilman Roger Berliner last week introduced a resolution calling upon the Maryland Public Service Commission to condition any approval of the sale of Pepco to Exelon on obtaining substantial ratepayer benefits, including, top quartile performance in three years and tying rate recovery to Exelon’s performance.”
“I don’t need to tell you—or our constituents—how long all of us have suffered from unacceptably poor service, not when we endured five years in a row of lowest quartile performance,” said Berliner in a letter to the rest of the council. “Fortunately, Exelon does have a better track record when it comes to reliability and is in a stronger financial position than Pepco. But we should not cross our fingers when it comes to improved service. Our state regulators should insist upon it.”