Credit: Darrow Montgomery

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If you thought the controversy surrounding the Pepco-Exelon merger had settled, think again: Two advocacy groups opposed to deal say they will file another legal challenge to it—this time in the D.C. Court of Appeals—if the regulatory body that oversees local utilities rejects their case in a decision expected to come down Friday.

Along with the District’s Office of the Attorney General and Office of the People’s Counsel, watchdog organizations Public Citizen and DC SUN in April filed a motion for the three-member D.C. Public Service Commission to reconsider its approval of the nearly $7 billion merger the month before. Now, those groups say they’re prepared to go to court if the PSC denies that reconsideration. They’d have 60 days to do so after tomorrow’s decision, if it’s against their favor.

“Public Citizen and DC SUN are arguing both that the decision was wrong on the merits and that the order should be vacated for several additional reasons,” a release explains. Those reasons include that the PSC “gave too little public notice of hearings on the settlement, “violated its own rules when it granted the utilities’ request to approve the merger,” “unlawfully contradicted its prior reasoning and decisions without explanation,” and “misapplied the governing legal standard: whether proponents of the merger demonstrated that—as a whole—the deal is in the public interest.”

A representative for Pepco-Exelon said the company would release a statement after the ruling is handed down. The merger was approved in March on a 2-1 decision, with a dissent from former D.C. Councilmember Betty Ann Kane.

Tomorrow’s decision is scheduled to be announced during a meeting that starts at 3 p.m.

Update, June 17: Looks like Public Citizen and DC Sun should start getting their court papers together: In a 3-0 ruling, the D.C. Public Service Commission denied their and other parties’ motions to reconsider a previous order approving the Pepco-Exelon merger as “in the public interest.”

Before formally casting her vote, PSC Chair Betty Anne Kane said she was “convinced and fully concur[red] that the commission has acted within the law” and did not commit and procedural errors. A motion to reconsider, she added, is “not a vehicle to rehash [old] arguments or raise new arguments that, with due diligence,” could’ve been raised sooner. Still, Kane specified that she maintained her reasoning in dissenting from the PSC order that green-lighted the merger.

“[There is] a structural flaw—an inherent conflict of interest—in merging the District’s electric distribution company with a holding company that has electric generation as its primary financial [incentive],” she said.

The D.C. Office of the People’s Counsel said in a statement that it would review the PSC’s decision and consider whether to challenge it in the D.C. Court of Appeals, focusing on whether the commission’s approval was “legally sound.”

“The Commission’s actions in this case have implications that extend far beyond this merger,” Sandra Mattavous-Frye, the head of OPC, said. “What’s at stake here are two fundamental factors: the public’s confidence that the Commission will decide cases in a fair manner and the belief of participating parties that the consumer benefits that they bargained for will be honored in any settlement negotiation. Both of these factors must be solidly in place as we move forward in making important decisions in a rapidly evolving energy market.”

DC Sun and Public Citizen said they were “deeply disappointed” in the ruling, claiming the merger will stymie hopes for renewable energy. City Desk has reached out to Pepco-Exelon for comment and will update this post if we hear back.

Update, 3:38 p.m.: A spokesman for Pepco-Exelon provided the following statement on the PSC’s decision: “We’re gratified that the Public Service Commission of the District of Columbia has upheld the March 23 order approving the merger. Since our two companies merged, customers in the District, as well as Delaware, Maryland and New Jersey, have seen improved efficiency, savings from our combined resources and an enormous range of benefits. We continue to move forward as one company with a focus on providing safe, reliable, affordable and clean energy to all our customers.”

Update, June 20: Late Friday afternoon, D.C. Attorney General Karl Racine said he would consider challenging the PSC’s ruling in appeals court as well. “My office has a mandate to act in the public interest of District residents, and the merger currently approved by the Public Service Commission between Pepco and Exelon does not meet this critical standard,” he said in a statement. “The only plan that sufficiently protects residential, including low-income, ratepayers is the plan originally approved last fall by our office, the People’s Counsel and the Mayor’s office. Our office is disappointed that the PSC denied our motion to reconsider its decision and, after further review, we will determine whether to challenge the PSC’s order.”