Coalition Will Urge Regulators To Tie Exelon’s Profit To New Standards

Flickr photo by Bill in DCA coalition led by Councilmember Roger Berliner will ask state regulators to tie power company Exelon’s profits to improved performance if it’s allowed to buy Pepco in an expected merger.

In April, Chicago-based Exelon announced it’s intention to buy Pepco Holdings Inc. for $6.8 billion. On Friday, the state’s Public Service Commission (PSC) will hear from parties interested in intervening in the approval process for the merger.

Berliner’s newly formed Coalition For Utility Reform will petition to intervene. The group, to be represented by Berliner and Gaithersburg Councilmember Ryan Spiegel, is asking the PSC to “require half of the merged entity’s profit to be determined by its ability to meet standards “related to cost minimization, reliability, customer satisfaction, carbon reduction and environmental stewardship, distributed energy resources, customer control and innovation.”

“This broad coalition recognizes that the current utility system is broken. No one knows this more than the residents of Montgomery County and Prince George’s County,” Berliner said in a press release. “It does not serve our ratepayers, our environment or our economy. There is a growing national consensus that we need fundamental reforms. The reforms the Coalition are advancing would result in giving more power to ratepayers; creating a cleaner, much more reliable grid; improving cost-effectiveness;  and spurring innovation and economic growth. This is a future that Montgomery County and Prince George’s County residents deserve, and this is a future we are prepared to fight for together.”

The coalition includes a number of local elected officials.

While announcing its filing for approval, Pepco and Exelon promised a long list of benefits to customers that would come about as a result of the merger.

One of those was titled “Enhanced Customer Service and Reliability Committment,” in which Exelon said the merger would mean cutting the frequency of power outages in Maryland by 38 percent and cutting the average outage duration by 43 percent by the 2018-2020 period.

In its approval filing, Exelon offered to be subject to financial penalties if Pepco or Delmarva Power (another of Pepco Holding Inc.’s utilities) don’t meet those goals.

Exelon also proposed giving $40 million to the Maryland PSC that “can be used as the PSC deems appropriate for customer benefits, such as bill credits, assistance for low-income customers and energy-efficiency measures.”

According to Powerupmontco, led by North Bethesda resident Abbe Milstein, Exelon’s promised Customer Investment Fund is an example of why the PSC must require a larger investment.

PowerUpMontCo will also petition to intervene in the merger approval process on Friday. In it’s petition, the group claims only $29 million of the proposed Customer Investment Fund would be allocated to Pepco customers, meaning, “just $50.00 per Maryland customer, a paltry sum when the Commission considers the dilapidated infrastructure Exelon could ultimately acquire as a result of the merger.”

Powerupmontco will ask the PSC to require “a multi-billion dollar investment of capital into the infrastructure to bring Pepco’s long-neglected and dilapidated distribution system up to top-quartile service performance levels.”

Pepco Holding Inc. shareholders will meet to approve the merger on Sept. 23. The companies anticipate completing the merger — which requires the approval of other state and federal regulators — in the second or third quarter of 2015. No rate increases are scheduled as a result of the merger.

PDF: Coalition For Utility Reform Petition To Intervene

PDF: Powerupmontco Petition To Intervene

Flickr photo by Bill in DC

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