D.C. mayor pressures regulators to let nuclear energy giant take over city utility
D.C. Mayor Muriel E. Bowser reversed course and backed a proposed takeover of Pepco, the city’s electric utility, by Exelon, a Chicago-based nuclear energy giant. Now she’s urging D.C. regulators to do the same, saying the deal her office negotiated is worth an about-face.
But Bowser’s endorsement has raised an obvious question as the District’s Public Service Commission is poised to decide as early as Friday whether to fast-track its review of the Bowser-backed proposal: Is it worth it?
Bowser has said she agreed to back the $6.4 billion merger after a month of private negotiations because Exelon’s final offer would increase the reliability of the city’s electric grid. It would also create a utility with a healthier balance sheet, she said, and give residents a four-year freeze on residential electric rates.
Bowser’s critics see it differently: The District sold out and got little in return, they say. Rates won’t be frozen, they note. Instead, Exelon will absorb up to $26 million in rate increases until 2019. After that, ratepayers could face sticker shock — multiple years’ worth of rate increases at once.
Even as they have praised the proposed merger as a windfall for stockholders, analysts on Wall Street have also cast doubt on whether Pepco needs a merger to remain a profitable business.
Environmentalists and opponents in neighboring Maryland, meanwhile, dispute that a merger would lead to any better assurances that the lights will stay on in the nation’s capital and its northern suburbs.
Nothing in the mayor’s deal “addresses the underlying and fundamental” problems, said Paula Carmody, the people’s counsel for the state of Maryland, which is appealing the decision of regulators there to approve the merger.
Bowser and other advocates for the proposed merger in the District, Carmody said, “are counting the benefits . . . but on the harm side, they are not mitigating or eliminating any of them.”
The D.C. Public Service Commission unanimously rejected the proposed merger Aug. 25, tripping up the mega-deal on one of its final regulatory hurdles.
The PSC said the merger would create an inherent conflict by forcing the District to buy energy from a nuclear energy producer even as the city has made encouraging green energy a top priority.