WASHINGTON — Whether the Pepco-Exelon merger is a good deal for consumers depends entirely on who you ask.
Both supporters and those opposed to the $6.8 billion union have argued their sides loudly for the last two months, but the final deal, as approved by D.C. regulators Wednesday, and by Maryland regulators 10 months ago, includes some tangible, hard set numbers.
In the District, Exelon will set aside $72.8 million in customer benefits including $25.6 million in rate relief for both residential and commercial customers to help offset any future Pepco rate increases. Exelon has also agreed to provide $14 million for a one-time credit for residential customers.
That one-time credit will average between $50 and $60 for each residential customer, according to the D.C. Public Service Commission.
In Maryland, as approved by the Maryland Public Service Commission, ratepayers will get a $100 credit.
Terms set by Maryland regulators included 46 conditions, including $43 million for energy efficiency programs in Prince George’s and Montgomery counties and the Delmarva Maryland service territory.
The utilities also agree to aggressive reliability performance standards.
All told, Exelon has pledged $430 million in ratepayer credits, reliability improvements and other investments that would benefit customers in Delaware, New Jersey, Maryland and D.C.
Despite those commitments, ratepayers could see the new utility request higher rates soon.
The three-year reprieve from a rate hike that Mayor Muriel Bowser’s administration previously negotiated was not included in the final agreement. There are no protections for consumers in the D.C. approved terms that would prevent the new utility from seeking an immediate increase. And Bowser says D.C. residents could face a rate increase as soon as this summer.
Pepco has not sought a rate increase since 2014. Any rate increase would require the approval by the Public Service Commissions in both D.C. and Maryland.
Clear winners of the newly completed merger are Pepco’s long-term stockholders.
Pepco stock (NYSE: POM) closed at $21.44 per share the day before the merger was first proposed April 25, 2014. As part of the merger, shareholders receive $27.25 per share, 27 percent more than their shares were worth before the merger proposal was announced.
