Delmarva Power owner Pepco Holdings Inc. and Exelon Corporation announced they have reached a settlement with the Government of the District of Columbia. The package was shaped to address the concerns articulated by the District of Columbia Public Service Commission (PSC) in its August order.
It also marked a decision by Exelon to not walk away from the deal, despite a number of concessions. Exelon does have room to maneuver, given its massive size
The deal also includes moving some Exelon jobs to the District of Columbia from Philadelphia, home of Exelon’s PECO. The Delaware PSC ageeement also include job pledges.
The new package of benefits includes commitments to provide bill credits, low-income assistance, fewer and shorter outages, a cleaner and greener D.C., and investment in local jobs and the local economy. Pepco Holdings and Exelon submitted the settlement agreement to the PSC for approval as part of the existing merger proceeding.
The Delaware Public Service Commission, which earlier approved the merger, is looking at the settlement package to determine if it is getting fair treatment.
Also signing on to the settlement agreement are the Office of the People’s Counsel and the Office of the Attorney General of the District of Columbia, as well as the Apartment and Office Building Association of Metropolitan Washington, the District of Columbia Water and Sewer Authority, the National Consumer Law Center and the National Housing Trust.
“We heard the Public Service Commission’s concerns loud and clear, and this new merger proposal presents greater benefits to the District,” said Chris Crane, of Exelon. “Our settlement includes more than 120 commitments to ensure the merger is unequivocally in the public interest.”
Under the new proposal, Exelon will more than double direct benefits to customers by providing $72.8 million for bill credits, low-income assistance, renewable energy and energy efficiency programs in the District. These funds are expected to offset distribution rate increases for residential customers through March 2019. Of the direct funds provided, $16.15 million would be used to help low-income customers.
“This new proposal meets the needs of families and businesses in the District,” said Joseph Rigby, CEO of Pepco Holdings and a former Delmarva Power executive. “Merging with Exelon is the only way to provide Pepco customers and communities these significant benefits, which we believe are too great to forfeit.”
Pepco and Exelon have committed to invest substantially in advancing the District of Columbia’s long-term sustainability goals, including $3.5 million for new renewable energy and $3.5 million for energy efficiency programs. In addition, Exelon will significantly expand solar energy in the District by developing up to 10 megawatts (MW) of new solar generation and making it easier and faster for customers to install solar panels. Exelon will provide another $5 million of capital to governmental entities to develop renewable energy in the district and will purchase 100 MW of wind energy. In addition, Pepco will work with the District to develop at least four new microgrids.
Under the enhanced proposal, Pepco will agree to reduce the frequency and duration of power outages. Pepco’s reliability performance will exceed the standards the PSC has set or the company will face significant financial penalties if it fails to do so.
The new package of benefits also includes commitments by Pepco Holdings and Exelon to promote local jobs and an additional $5.2 million for workforce development in the District.
Exelon also will continue Pepco’s support for the local community by guaranteeing charitable contributions in the District of $19 million over 10 years to nonprofits that serve residents in the District.
