The D.C. Public Service Commission on Tuesday rebuffed a multi-billion dollar proposed merger between power companies Exelon and Pepco.
The three-member commission unanimously rejected the $6.8 billion merger.
Chicago-based Exelon announced in April 2014 plans to acquire Washington-based Pepco Holdings. The deal would have created the largest electric and gas utility in the region with about 10 million customers in cities including Baltimore, Chicago, Philadelphia and Washington.
Despite garnering the approval of several surrounding states, Exelon and Pepco failed to reach settlements with regulators in Washington D.C.
Chairwoman Betty Ann Kane said in a statement after the commission's meeting that the companies failed to show that the merger was a benefit to the public.
"The public policy of the District is that the local electric company should focus solely on providing safe, reliable and affordable distribution service to District residences, businesses and institutions," said Kane. "The evidence in the record is that sale and change in control proposed in the merger would move us in the opposite direction."
The companies expressed disappointment in the decision and said the commission did not recognize the benefits of the merger:
“We continue to believe our proposal is in the public interest and provides direct immediate and long-term benefits to customers, enhances reliability and preserves our role as a community partner. We will review our options with respect to this decision and will respond once that process is complete.”
Following the rejection, Pepco shares fell 19 percent to $21.88 a share and Exelon fell 3.4 percent to $31.53, according to Bloomberg.
The companies now have 30 days to ask the commission to reconsider the proposal.