DC regulators reject merger between Delmarva Power parent and Exelon.

The Public Service Commission for the District of Columbia has rejected the merger of Delmarva Power owner Pepco Holdings and Chicago-based Exelon.

The utilities  had previously gained approval from regulators in Maryland, Delaware and New Jersey for the merger that includes Atlantic City Electric and Pepco, which serves  Washington, D.C. and Maryland suburbs.

Exelon) and Pepco Holdings Inc.  Tuesday  issued the following statement in response to the Public Service Commission of the District of Columbia’s decision on the companies’ proposed merger.

“We are disappointed with the commission’s decision and believe it fails to recognize the benefits of the merger to the District of Columbia and its residents and businesses. We continue to believe our proposal is in the public interest and provides direct immediate and long-term benefits to customers, enhances reliability and preserves our role as a community partner. We will review our options with respect to this decision and will respond once that process is complete.”

D.C. Public Service Commission Chairman Betty Ann  Kane stated, “The public policy of the district is that the local electric company should focus solely on providing safe, reliable and affordable distribution service to district residences, businesses and institutions. The evidence in the record is that sale and change in control proposed in the merger would move us in the opposite direction.”

Regulators and public interest groups  have been uncomfortable with the sheer size of Exelon and fears that its large nuclear power business could choke off alternative energy initiatives.

“Our interests would be dwarfed by the interests of the surrounding consumers and we would be at a huge disadvantage, including disproportionately bearing the expenses without a proportionate share of the benefits,” state  Rep. John Kowalko, D-Newark, a long-time critic of Delmarva stated in a social media post. ” I urged the Delaware Public Service Commission to reject the proposal, but it was ultimately approved. I applaud the DC PSC for their willingness to craft a responsible decision to the proposed merger and reject it.”

Utility operations at Exelon  are separate  from the power generation side of Exelon.  Other Exelon utilities include PECO in southeastern Pennsylvania and BG&E in a portion of Maryland.

Under deregulation in Delaware, Delmarva purchases its powered through a bidding process. Pepco itself does not generate elective power.

Exelon and Pepco have 30 days to appeal the decision.

Shares of Pepco have dropped more than  15 percent in the past five days, although some of those losses are due to the sharp correction in the stock market.