The Maryland Public Service Commission has approved a $6.8 billion merger between Pepco and Exelon Corp., pushing Chicago-based Exelon a step closer to becoming one of the nation’s largest utility companies.
The acquisition still has to be approved by regulators in the District, where opponents to the deal are outspoken. The Maryland commission on Friday was narrowly split on the decision, voting 3-2 to approve the merger with a series of conditions.
“Exelon has demonstrated that it knows how to run electric and gas distribution companies; indeed it is nationally recognized for its standards of excellence, and Maryland’s consumers will be better off for it,” the ruling states.
Approval of the acquisition of Pepco Holdings Inc. means that Exelon, which is already the parent of Baltimore Gas and Electric Co., will provide electricity to 80 percent of Maryland consumers.
While supporters of the merger say the widespread control can help to improve reliability with and speed responses to major power outages, opponents say the merger will eliminate healthy competition and lead to rate increases.
“The merger will impose substantial competitive harm to Maryland’s electricity market by eliminating across-the-fence competition, silencing PHI’s unique non-generation voice and chilling innovation in new energy-related technologies and products,” commissioners Harold Williams and Anne Hoskins wrote in their 52-page dissent.
Environmentalists have opposed the acquisition, decrying the reliance that Exelon has on power generation through its nuclear power plants as its business model.
Pepco was divested from electricity generation more than a decade ago, and now profits from serving as an energy supplier rather than generator.
Revised conditions for the approved merger include an increase from $50 to $100 for the onetime per-customer credit, $43.2 million for energy-efficiency programs, $14.4 for green sustainability funds in Montgomery and Prince George’s counties and an increase in reliability standards.
Parties will have until May 26 to decide whether they agree to the terms set out by the Maryland Public Service Commission.
The D.C. Public Service Commission is accepting public comment on the merger proposal through May 27 and is expected to issue a final decision on the matter over the summer.