WASHINGTON (AP) — The mayor of the nation’s capital withdrew her support Tuesday for a proposed $6.8 billion merger of power companies Pepco and Exelon.
The Washington Post reported (http://wapo.st/1oWtosf ) that District of Columbia Mayor Muriel Bowser she said she could not agree to new terms for the deal set by the D.C. Public Service Commission. She said her administration was set from the beginning on an affordable, reliable and sustainable arrangement.
“We pulled everyone together to negotiate an agreement that was a great deal for D.C. residents,” Bowser said in a statement obtained by the newspaper. “The PSC’s counterproposal guts much needed protections against rate increases for D.C. residents and assistance for low-income D.C. ratepayers. That is not a deal that I can support.”
After the public service commission first rejected the merger last year, saying it would not benefit ratepayers, Bowser’s administration had negotiated for the companies to pay the District of Columbia $78 million for its support for the merger from District, Delaware, Maryland, New Jersey and federal regulators. That would have cushioned District residents from rate increases for four years, contained job guarantees and included investments in renewable energy.
But District regulators rejected the plan last week, saying it was “not in the public interest.” They also said it would exacerbate an imbalance in which federal taxpayers and businesses subsidize residential rates.
The public service commission then said it would reconsider the deal under new terms that removed any guarantee to hold down residential rates. That prompted Bowser to withdraw her support.
On Friday, PSC Chair Betty Ann Kane told WTOP that the commission wanted to create an escrow fund for two sub accounts at Pepco.
Kane explained that $32.8 million of the customer investment fund was for projects that would put monies into funds that are under the control of D.C. government. Kane said that there were concerns that those funds “would be subject to diversion to the general fund — which is something that has happened time and time and time again.”
Kane says the PSC has no authority over the District government but it does have control over Pepco.
Kane explains putting the money into Pepco sub-accounts allows the PSC to hold the utility accountable for making sure that the ratepayer protection funding actually goes where it’s supposed to go.
The proposed acquisition of Pepco Holdings Inc. of Washington by Chicago-based Exelon Corp. would create the nation’s largest electric utility as measured by the number of customers served. The plan has undergone a nearly two-year approval process.
Pepco continues to talk with D.C. officials and other parties, spokesman Vincent Morris said in an email to the Post.
The commission said the nine parties to the deal need to either agree to its terms or unite around another proposal by March 11. But the deadline could be even closer: Exelon chief executive Christopher M. Crane told analysts on an earnings call last month that if the proposed merger with Pepco was not completed by March 4, the company would walk away.
WTOP’s Kate Ryan contributed to this report.
Information from: The Washington Post, http://www.washingtonpost.com