Updated at 11:15 a.m. — Exelon and Pepco have promised Montgomery County new energy efficiency programs, five megawatts of solar power generation and recreational trails in exchange for the county’s support of the utility companies’ merger bid.
Exelon announced the settlement agreement on Tuesday, a few weeks after it upped the amount of money it will put into a “customer investment fund” and promised quicker reliability improvements if state regulators approve its $6.8 billion purchase of Pepco.
The settlement was also made with Prince George’s County. Together, the two counties represent all Pepco customers in Maryland.
“This agreement is a good deal for Montgomery County,” Montgomery County Executive Isiah Leggett said in a prepared release. “Our residents deserve a top-performing utility that is accountable to customers. Exelon and Pepco Holdings are committing to reduce both the frequency and duration of outages and to bring Pepco’s reliability into the top quartile, or face financial penalties if they fall short. I’m also pleased that Exelon and Pepco have agreed to make major investments in technology and innovation that will create jobs and drive the energy, environmental and economic policy goals of Montgomery County and Maryland.”
Merger critics, including Councilmember Roger Berliner, have urged regulators on the state’s Public Service Commission to require renewable energy improvements if it approves the deal.
The Berliner-led Coalition for Utility Reform claimed Exelon’s reliance on nuclear power generation has led the company to oppose renewable energy initiatives and doesn’t bode well for an increase in renewable technologies from Pepco.
On Tuesday, Berliner said in a statement that the settlement doesn’t do enough and “is unlikely to be adopted in the absence of other critical concessions by Exelon.”
“The State of Maryland, the Office of People’s Counsel, and the Maryland Public Service Commission staff have all strongly opposed the merger as contrary to the public interest,” Berliner said in a prepared statement. “The overarching issue that Exelon’s settlements have thus far failed to address is Exelon’s track record of supporting its nuclear power plants at the expense of renewable and distributed energy resources.”
Berliner added that Exelon is negotiating a settlement with his Coalition for Utility Reform.
The settlement with the county includes $57.6 million that Montgomery and Prince George’s will use for energy-efficiency programs. That money will come from the $94.4 million customer investment fund Pepco and Exelon had promised earlier.
The remaining $36.8 million will be used for bill credits of about $50 per Pepco and Delmarva Power customer in Maryland.
At least 20 percent of those “energy efficiency funds” will go “to programs targeting low- and moderate-income customers.”
Pepco and Exelon also promised a $50 million “Green Sustainability Fund” that could be used for microgrids, water conservation, community solar and other projects. The utilities also promised 5 megawatts of solar power generation each for Montgomery and Prince George’s.
The settlement calls for Pepco to “request that the PSC initiate a ‘grid-of-the-future’ proceeding to examine opportunities to transform the electric grid through smart grid technology, microgrids, renewable resources and distributed generation.”
Exelon will give the PSC up to $500,000 to pay for a consultant for the initiative.
Finally, Pepco has agreed to allow the development of recreational trails “along certain” Pepco transmission corridors.
“We are pleased to have reached this settlement agreement, which will deliver significant, direct economic and reliability benefits to all of Pepco and Delmarva Power’s customers in Maryland,” said Chris Crane, Exelon president and CEO. “It also represents our commitment to further modernize our grid to incorporate more renewable and distributed generation, increase reliability and protect consumers through effective cost-containment measures.”
The merger, which would put all of Pepco Holding Inc.’s utilities in four states and D.C. under the control of Chicago-based Exelon, has been approved by federal regulators and regulators in New Jersey and Virginia.
