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Pepco/Exelon: The Merger
One of OPC’s most significant undertakings was its opposition in 2014
to the proposed merger between Pepco and the Chicago-based energy goliath Exelon Corporation, a company with revenues of $34.5 billion
in 2015.26 This acquisition was set to create the largest electric utility conglomerate in the world, to be headquartered in Chicago, upending the status quo for District ratepayers. In exchange, Exelon proposed to give D.C. consumers a financial offer of $15 million as added benefits, including rate increase protection in the form of a rate credit to Pepco’s residential customers, low-income energy assistance, and more. Mattavous-Frye led
a team of dedicated litigators and emphasized that OPC would not support any merger that did not outline clear benefits for consumers, such as rate relief, improved service reliability, training opportunities for D.C. residents, ring-fencing to protect D.C. consumers from Exelon’s non-utility-related financial risks, and support for continued sustainability efforts in the city. The PSC agreed with OPC that Pepco/Exelon failed to demonstrate that the merger proposal was in the public interest because the proposal as filed provided excessive benefits to the company’s shareholders and increased rates and risks to consumers. The PSC directed the parties to return to the settlement table.
OPC — joined by D.C.’s Office of the Attorney General, the Apartment and Office Building Association, and several federal agency intervenors — secured a settlement agreement with Pepco that increased the settlement proposal from $15 million to $72 million, more than five times the original proposal. Specifically, the settlement required Pepco to increase consumer cash payout benefits, adopt rate increase protections, assist residents who had low incomes, include commitments regarding renewable energy, and provide job training opportunities for D.C. residents. OPC was specific in its request regarding job training opportunities: Pepco/Exelon was required to open a workforce academy to train D.C. residents for skilled jobs in the utility industry. Mayor Muriel Bowser, Pepco/Exelon, and Washington Gas, per the settlement terms, created the DC Infrastructure Academy, which has trained more than 4,600 young men and women for skilled utility jobs since its opening.27 The Academy is one of a few of its kind in the country.
OPC’s Journey to Protect Utility Consumers 27