The Public Service Commission of the District of Columbia has unanimously rejected the proposed merger of Exelon and Pepco Holdings, stating that the utilities have not persuaded the Commission that the merger is in the public’s interest.
Exelon announced the $6.83 billion acquisition of Pepco in April 2014. The merger would bring together Exelon’s three electric and gas utilities — BGE, ComEd and PECO — and Pepco Holding’s three electric and gas utilities — Atlantic City Electric, Delmarva Power and Pepco — to create the leading mid-Atlantic electric and gas utility.
Regulators in New Jersey, Delaware, Virginia and Maryland had already approved the merger.
In making the determination, the three-member Commission said it found no evidence that the merger would increase service reliability. It also expressed concern about a new management structure that did not include the Pepco region president on the Exelon Utilities executive committee. In a summary of the decision, the Commission stated that Pepco’s influence would be diminished within the new structure, making it more difficult for the Commission to regulate Pepco. The Commission further stated that Pepco’s ability to adapt would be “constrained by an increased management bureaucracy” and that “the inherent conflict of interest…might inhibit our local distribution company from moving forward to embrace a cleaner and greener environment.”
Exelon and Pepco said in a joint statement that they were disappointed with the Commission’s decision and will review their options. They have 30 days to ask the Commission to reconsider.
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