December 29, 2015 Read More →

U.S. General Service Administration, Largest Pepco Customer, Opposes Exelon Takeover

Amy Poszywak for SNL:

The U.S. General Services Administration, which buys electricity on behalf of federal government properties in the District of Columbia, has joined the opposition to Exelon Corp.’s proposed acquisition of District-headquartered Pepco Holdings Inc., according to a brief filed by the government agency on Dec. 16.

The GSA said in an initial brief with the District of Columbia Public Service Commission that the deal, under the terms of a settlement agreement Exelon and Pepco reached with the Office of the Mayor for the District of Columbia, is not in the public interest and should not be approved without additional conditions that beef up benefits to ratepayers. The settlement, the agency said, does not provide any direct benefits to commercial customers.

Also, the GSA suggested that the PSC require the companies to commit to a two-year rate freeze of Pepco’s distribution base rates and install a cap on “indeterminate microgrid costs” — the settlement reached with the mayor’s office, if approved, would require Pepco work with the District to develop at least four microgrids — that the utility may incur and seek recovery from under the settlement agreement.

The GSA is the largest consumer of energy in D.C., according to The Washington Post. In the brief, the agency said it represents 25% to 30% of Pepco subsidiary Potomac Electric Power Co.’s annual distribution load and delivery charge revenue.

Full article ($): Pepco’s largest customer joins in opposition of acquisition by Exelon

Aaron C. Davis and Thomas Heath for the Washington Post:

The GSA’s move complicates a mega-merger that has already become mired in accusations of pay-to-play politics in the District. After approvals in other states, the PSC initially rejected the merger in August.

But Exelon and Pepco lobbied nonprofit organizations across the city to publicly support the merger, saying millions in philanthropic donations would be dependent on the merger going through. Exelon has since mounted a major public relations campaign to build support, including hiring the head of a political action committee that backed Bowser to lobby her administration on the merger. The hiring of the lobbyist and former head of FreshPAC, Earl “Chico” Harkin, was first reported by WAMU-FM.

An analyst who studies such mergers said the GSA’s decision not to support the merger is probably an attempt to get a better deal from Exelon.

“It looks like a party in the case is trying to extract better terms for itself, which is not unusual in this kind of proceeding,” said Paul Patterson, a utility analyst for Glenrock Associates. “I would be surprised if, in and of itself, it has a critical impact on the proceedings.”

GSA urges regulators to reject current Pepco-Exelon merger deal

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