Roger Berliner, chairman of the County Council’s transportation, infrastructure, energy and environment committee, called on state regulators Tuesday to force Exelon to make reliability commitments if the Chicago-based electric company merges with Pepco Holdings.
The two companies filed an application with the state’s Public Service Commission on Tuesday seeking approval of their proposed merger. Pepco Holdings owns Pepco, which operates in Montgomery County, Prince George’s County and the District, as well as, Delmarva Power, which serves the Delmarva Peninsula.
The two companies agreed to merge after Exelon offered $6.8 billion for Pepco.
Berliner notes the merger “will result in a single utility totally dominating the state.” That’s because Exelon already owns Baltimore Gas and Electric the other major utility in the state. Berliner is asking the commission, which regulates state utilities, to require reliability and service commitments from Exelon before approving the merger.
“Our council has formally stated that should the commission conclude it is in the public interest, it could only do so with binding commitments to superb reliability and better service to our long-suffering constituents,” Berliner said in a statement.
In its filing, Exelon wrote that the merger will result in an estimated $600 million in economic benefits for the state and 6,300 to 7,000 new jobs. If the merger is approved, the company said it would provide $40 million to the state, which the commission could spend on state programs such as bill credits, assistance to low-income customers or energy-efficiency measures.
“The filing we are making today describes in detail how our proposed merger will benefit Maryland’s economy and the customers served by Pepco and Delmarva Power,” Exelon President and CEO Chris Crane said in a press release. “The commitments we are making will deliver immediate economic benefits to customers and Maryland, and will ensure that Pepco and Delmarva Power continue their long history of investing in their communities.”
Paul Elsberg, a spokesman for Exelon said in an email, that in the filing, "Exelon has made specific and concrete commitments to build on the significant improvements to service reliability by setting new, more stringent reliability targets. By 2020, Exelon commits to reducing the frequency of power outages for Pepco by 38 percent and average outage duration by nearly 43 percent compared with the 2011-2013 period."
The company said it would be willing to accept financial penalties if Delmarva Power or Pepco do not meet their reliability targets.
Berliner previously asked the commission to require Exelon to make firm commitments to improve electrical reliability in the region after the merger was first announced in May. At the time, he said the state has not had a strong utility regulator.
“Anytime you have such a dominant player, you need a very strong regulator as a counterweight,” Berliner said.
Correction: Originally this article stated Exelon owns Con. Ed and PECO, two other utilities. While it does own PECO, that utility does not operate in Maryland. Exelon does not own Con. Ed.. We regret the error.
