Pepco Exelon Merger: DC Ratepayers Shouldn't Count on That 50 Dollar Check

Marc Battle, Vice President at the Potomac Electric Power Company (PEPCO), told a meeting of Advisory Neighborhood Commission (ANC) 1B/U Street February 5 that PEPCO customers should not count on getting a rumored $50 rebate check as a result of the proposed merger between PEPCO and Chicago-based energy giant Exelon Corporation, "the nation's leading competitive energy provider".

Battle told the ANC that the proposed terms for the merger, now being considered by the DC Public Service Commission, included a $14 million settlement. The Public Service Commission may dispose of as it pleases, and Battle thought it would be better spent in other ways.

"The settlement would be more effectively used as a block, not a fifty dollar credit," Battle said.

Talk of a fifty dollar check was in the air at the meeting as Robert Robinson of the Grid 2.0 Working Group, which opposes the merger, told the ANC that a $50 check and a three-year rate freeze are the only benefits District ratepayers would be likely to receive from the deal.

"The ratepayers become a cash cow," Robinson said. "We get fifty dollar benefit, that's all."

Exelon executives have already promised a $50 rebate for Maryland Pepco customers, according to a report in the Baltimore Sun.

Robinson told the ANC that the beneficiaries of the most lucrative portion of the deal will be shareholders and company executives, who will get to share a premium estimated at $1.2 - 2.5 billion.

"What does Exelon get from that? The shareholders go away," Robinson said.

To keep the meeting down to a manageable length, all presenters were given a limited amount of time, and then asked politely but firmly to wrap up when their time expired. This rule became even more necessary when it was revealed (in mid-discussion of the merger) that the room where the ANC was meeting at the Banneker Community Center (2500 Georgia Avenue) needed to be vacated at 9pm so it could be used as an emergency overnight shelter for the area homeless who were gathered outside waiting in the cold.

ANC1B Chair James Turner (district 09) told Robinson the discussion would have to wrap up. There would be no vote that evening, Turner said. The deadline for comment was March 26, so further discussion and a vote on a resolution, if any, could take place at the next ANC meeting (tentatively scheduled for Thursday, March 5, at a location to be determined).

Robinson looked extremely unhappy at this news and indicated he had not said all he wanted to. He also told the ANC that a comment made closer to the Public Service Commission deadline was likely to have much less impact than a comment now. Nevertheless, the portion of the meeting dedicated to this issue was closed after PEPCO Vice President Battle got to make remarks, including those mentioned at the top of this post.

Battle also said that the DC Public Service Commission would be starting hearings on the matter on Monday, February 9.

"These hearings are long, tedious, complicated, but important," Battle said.

See the DC Public Service Commission's case file on Pepco-Exelon merger here.

See a Washington City Paper article from yesterday concerning a new public opinion poll about the merger here.

The arithmetic of the proposed rebate check: The settlement is $14 million. Pepco said on its web site that it had 255,000 customers in DC in 2010. Today, it's probably a higher number. Fourteen million divided by 255,000 is a little over $54.90.