- - Friday, April 22, 2016

The D.C. Public Service Commission broke the law when it approved a merger last month between Pepco and energy giant Exelon, according to the District agency  representing residents’ interests.

“I strongly believe that the manner in which the decision was reached was legally flawed,” said D.C. People’s Counsel Sandra Mattavous-Frye. “If the flaws in this order are not corrected, it will erode the trust and confidence of consumers and all parties that practice before [the PSC].”

So Ms. Mattavous-Frye on Friday filed an application for reconsideration, asking the PSC to either reopen the reopen the case and permit all parties an opportunity to comment on its decision as is required by the PSC’s rules, or reject the merger as being “procedurally improper.”

The former option would allow Pepco, Exelon, Ms. Mattavous-Frye, D.C. Attorney General Karl Racine and Mayor Muriel Bowser, among others, to comment on how the March 23 approval was handled.

“As the energy regulatory landscape is rapidly evolving and a number of important policy issues will have to be made, I will use the full breadth of my authority to ensure the Commission’s process affords all parties the full opportunity to have their positions considered,” Ms. Mattavous-Frye said.

The PSC approved on Wednesday the $6.8 billion merger to create the largest publicly held utility company in the United States, after two years of debate and rejected deals.

“Today, we join together as one company to play a vital role as a leader in our industry and the mid-Atlantic region,” Chris Crane, president and CEO of Exelon said Wednesday. “We’ve made a number of commitments to customers in all of the Pepco Holdings utilities’ jurisdictions — the District, Maryland, Delaware and New Jersey — and we look forward to getting to work to deliver those benefits to our customers and communities.”

The commission approved the merger in a 2-1 vote, with Commissioner Betty Anne Kane, a former D.C. Council member, voting against it.

Unlike earlier deals, the utility commission did not need the approval of all the parties involved in the negotiations in order to approve the merger. Ms. Bowser, Ms. Mattavous-Frye and Mr. Racine had rejected the latest deal earlier this month.

The merger would set aside $72.8 million for the District in an escrow customer investment fund that includes $25.6 million to offset rate increases, $14 million would go to a one-time direct bill credit to be distributed among Pepco residential customers, $11.25 million for energy-efficiency programs for low-income residents and $21.55 million for grid modernization pilot projects. According to PSC, the customer investment fund will be controlled by the commission, not the mayor’s office.

The plan is essentially the same as the one the PSC offered in February after it had rejected a deal brokered by Ms. Bowser. At the time, the PSC said the deal would be approved only if everyone agreed to it. Ms. Bowser, Mr. Racine and Ms. Mattavous-Frye quickly opposed that proposal.

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