D.C. again rejects Pepco-Exelon merger, renegotiations possible

Pepco Exelon logos

Plans to create the largest utility in the U.S. hit another snag Friday when the D.C. Public Service Commission voted 2-1 to reject the merger proposition of Pepco Holdings and Exelon Corp.

The commission voted to reject the $6.8 billion deal under the terms offered by the utilities and Washington, D.C. Mayor Muriel Bowser's office — a deal meant to salvage the merger when the commission voted to reject the original terms in August 2015.

According to the Washington Post, the commission said there is a conflict of interest inherent in putting the District's power distribution under the control of an out-of-state utility.

Washington, D.C. is the merger's final hurdle after a wave of approvals from other East Coast regulatory boards, and the Federal Energy Regulatory Commission.

Pepco and Exelon now have two weeks to agree to conditions set by the commission in the hopes of saving their merger. The companies are currently considering the new terms, according to reports.

The Exelon-Pepco merger was previously approved in Maryland, New Jersey and Delaware.

The combination of the companies would bring together Exelon’s three electric and gas utilities — BGE, ComEd and PECO — and Pepco Holdings’ three electric and gas utilities — Atlantic City Electric, Delmarva Power and Pepco — to create one of the largest electric and gas utilities in the country.

The companies also made transaction-related filings with FERC and the Virginia State Corporation Commission. The transaction was also subject to the notification and reporting requirements under the Hart-Scott-Rodino Act and other customary closing conditions.

The combined utility businesses would serve about 10 million customers and have a rate base of about $26 billion. The purchase deal was worth about $6.8 billion.

 

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