ROCKVILLE - Pepco and Exelon Utility Holdings are now officially asking to become one. More than three months after Exelon announced it would buy Pepco, the companies filed a merger approval request with the Maryland Public Service Commission (PSC).
“The filing we are making describes in detail how our proposed merger will benefit Maryland’s economy and the customers served by Pepco and Delmarva Power,” said Chris Crane, Exelon president and CEO. “The commitments we are making will deliver immediate economic benefits to customers and Maryland, and will ensure that Pepco and Delmarva Power continue their long history of investing in their communities.”
Pepco President Donna Cooper said Exelon will provide $40 million in customer benefits and $50 million in charitable donations throughout a ten year period. Cooper said the merger may also bring up to 7,000 new jobs to the area along with a $623 million economic impact. Cooper said the filing will not affect current rates for customers and that Pepco does not plan to file for a rate increase in 2015.
“There is a very detailed analysis that takes place as it relates to the injections that would go into the economy that involves the customer investment fund and the residual impact of those particular injections into the economy, as well as the reliability commitment, which has a more direct impact in terms of jobs,” Cooper said.
In 2011 Pepco drew the ire of residents after derecho storms hit the area. Customers complained about being without power for more than a week and Pepco was later voted most hated company in America. Max Maxwell, vice president of asset management for Pepco, said power outages have been reduced to one outage per customer per year.
“The number is going down based on the work we’ve been doing the last several years as part of our reliability enhancement program. We have made some significant progress,” Maxwell said.
Councilman Roger Berliner (D-1), who was a vocal critic of Pepco during recent power outages, said the county will work closely with the PSC while it is considering the sale.
“I fully expect that our county will be a major participant in the regulatory proceedings that will determine the future of electric service in our area. It is a fundamental responsibility of our state regulators to determine whether this proposed merger—which will result in a single utility totally dominating the state—is in the public interest,” Berliner said. “Our council has formally stated that should the commission conclude it is in the public interest, it could only do so with binding commitments to superb reliability and better service to our long-suffering constituents.”
If the filing is approved, Exelon will own and operate more than half of Maryland’s major electricity suppliers: BGE, which is the largest utility company in Maryland with more than 1.2 million in the Baltimore metropolitan area, including 13,000 customers in Montgomery County; Pepco, which serves 537,000 customers in the Washington metropolitan area; and Delmarva, which serves more than 231,000 customers on the Maryland eastern shore. Pepco is the parent company of Delmarva Power.
PSC spokeswoman Regina Davis said the merger will not result in a monopoly because each company operates in a separate territory.