People’s Counsel Opposes the PSC’s Revised Pepco-Exelon Merger Settlement Agreement









For Immediate Release: Tuesday, March 1, 2016

Contact: Doxie A. McCoy, (202) 261-1180, This email address is being protected from spambots. You need JavaScript enabled to view it.">This email address is being protected from spambots. You need JavaScript enabled to view it.

Washington, D.C. - People’s Counsel Sandra Mattavous-Frye today said the Office of the People’s Counsel for the District of Columbia (OPC) has carefully and fully reviewed the Public Service Commission’s (PSC) revisions to the Pepco-Exelon settlement agreement announced on this past Friday and concludes that she cannot support the revised settlement agreement. The Commission has taken a principal benefit of the merger away from residential electricity customers by removing the guarantee of no rate increases for residential ratepayers through March 2019.

“The Commission’s order eviscerates the benefits and protections essential to render the proposed merger in the public interest by making changes to the $25.6 million rate offset provision for residential customers which was the single most critical provision I supported,” Mattavous-Frye said. “OPC has consistently focused throughout this long proceeding on ensuring that any outcome is in the best interest of ratepayers, and that the merger’s claimed benefits will be meaningful and verifiable, particularly for our most vulnerable residential ratepayers for whom electric bills consume a whopping and disproportionate percentage of their income. The inability to afford to pay their bills is a reality for many of our residents and cannot be trivialized and dismissed. Affordable rates and affordable housing are inextricably linked.”

When the initial Pepco-Exelon merger proposals did not provide any real and traceable benefits, nor mitigate potential risks, OPC vigorously opposed those proposals. The PSC in its August 2015 denial of the merger adopted many of OPC’s positions. When the joint applicants subsequently proposed a settlement agreement, OPC successfully negotiated for more tangible benefits.

The Commission’s order Friday denied the settlement agreement; nullified the benefits; and created an alternative settlement proposal. Unfortunately, the PSC’s alternative proposal for the application of the $25.6 million rate offset could translate into much higher rates for residential consumers because it removes a benefit essential to the justness and reasonableness of the merger for District residential customers, and therefore cannot be supported by the Office.

OPC took the lead in arguing for reliability and ring-fencing issues, jobs, and strongly advocated for additional conditions to facilitate the development of solar and other renewable resources in the District, measures that will benefit all District ratepayers. Moreover, from the beginning of this proceeding, OPC helped facilitate full consumer participation through its education and outreach briefings to community groups and Advisory Neighborhood Commissions.

Mattavous Frye said, “I am hopeful all parties and consumer participants to this case will not lose sight of the real issue in this case—the protection of our most vulnerable residents. Going forward, we will need to work cooperatively to ensure that all consumers in all 8 wards of our city are guaranteed affordable rates and reliable service, and that once the fanfare dies down, our most vulnerable residents are not forgotten.”