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On Thursday, a smattering of activists, councilmembers, and non-profit types will head to Freedom Plaza to protest something that the District has heard a lot about lately: the takeover of local power utility Pepco by Chicago-based power company Exelon. The two power companies, meanwhile, have continued their campaign of radio and newspaper ads in favor of the merger.
Wait, what month is it? Wasn’t this resolved in August?
LL can’t blame you if you thought that the Pepco takeover fight—somehow both surprising and inscrutable—was over when the District’s Public Service Commission made a surprise ruling against it in August. But a $6.8 billion business deal isn’t going to go away that quietly.
While the PSC ruling seemed to put the kibosh on an agreement which other state commissions had already approved, Pepco and Exelon still had 30 days to appeal the ruling, with a potential court appeal after that. The two companies tell LL that they plan to file an appeal before the 30-day period runs out.
The activists’ arguments against the merger have remained the same, although they’ve now been bolstered by hearing PSC echo their concerns. Green activists fret that Exelon will keep Pepco from focusing on renewable energy. Cash-conscious power customers (like the Apartment and Office Building Association real estate trade group) think it’ll mean higher rates as Exelon looks to fund its fleet of aging nuclear plants.
This time, though, merger opponents are focused not on the PSC, but on a new target: Mayor Muriel Bowser. Thursday’s rally in front of Bowser’s office in the Wilson Building is aimed at convincing the mayor not to sign on to a settlement agreement that may or may not actually exist.
The final decision lies with the PSC, not with Bowser. But if Pepco and Exelon can win her over as a potential stakeholder, presumably with the offer of more money for low-income ratepayers and improved infrastructure, they could appeal to the PSC that the District government is now supportive of the takeover. Bowser’s backing for the merger could also convince other stakeholder groups to change their mind and back it, instead.
“Our understanding is now, after the fact, Pepco and Exelon are going to the mayor and trying to cut a behind-the-scenes deal,” says Anya Schoolman, the executive director of the Community Power Network, a green energy organization.
If the settlement offer does exist, though, its opponents are having trouble finding out what the terms are. Bowser spokesman Michael Czin declined to comment about the possibility of a settlement. When LL asked the power companies if they had made a settlement offer to the administration, Pepco and Exelon responded with a joint statement refusing to “discuss the specifics of our merger approach at this time.”
“It’s all rumors at this point,” Schoolman says. “You know, we hear vague mentionings.”
Indeed, for all the opponents know, Bowser might feed any settlement agreement directly into a shredder. After the PSC decided against the merger last month, Bowser’s office issued a statement saying she supported the ruling to block the takeover. Since then, the mayor hasn’t said anything—at least publicly—to suggest she’s changed her mind.
In the end, opponents’ best defense against the merger might not be a Freedom Plaza protest, but the self-interest of the four states involved in the deal. If Bowser and the District cuts too good a deal, commissions in states like Virginia, Maryland, Delaware, and New Jersey might throw their own deals with Exelon into chaos by trying to extract more concessions.
“If Exelon [were] to come to the table with a bigger package deal on the consumer investment fund, that would be problematic for the other states that have already signed off on the deal,” says Allison Fisher, climate and energy outreach director at Public Citizen.
Still, Pepco and Exelon aren’t giving up just yet. Along with a series of radio ads, the two companies paid for a full-page ad in the Washington Post Tuesday making the case for the merger. Signed by District heavies like Greater Washington Board of Trade boss Jim Dinegar, D.C. Chamber of Commerce President Harry Wingo, and former mayor-turned-Federal City Council CEO Tony Williams, the ad promises quicker reactions to storm outages if the merger goes through.
Activists also fret about Pepco’s influence in and around the administration. Former top Pepco exec Beverly Perry works as one of Bowser’s most influential staffers as senior advisor. Former Pepco exec Vincent Orange, meanwhile, now serves as an at-large councilmember with a committee portfolio that includes his old employer.
Despite their PSC setback, Pepco and Exelon are no slouches when it comes to influencing the Wilson Building. Pepco’s influence in the District government was enough, for example, to gut Ward 3 Councilmember Mary Cheh’s plan to study a publicly-owned alternative to the company earlier this year. Now activists are left hoping that lobbying won’t extend to a settlement with Bowser—if the deal exists at all.
Photograph by Darrow Montgomery