Pepco Exelon Merger: Charm Offensive Comes to ANCs

Representatives of the Potomac Electric Power Company (PEPCO) and Chicago-based energy giant Exelon are appearing at ANC meetings to brief about the proposed purchase of PEPCO Holdings by Exelon, and to say the purchase is in the public interest. Executives of PEPCO and Exelon appeared at the regular monthly meetings of Advisory Neighborhood Commission (ANC) 2F/Logan Circle and 1B/U Street on June 4 and 5, respectively.

PEPCO Regional President Donna Cooper and Exelon Investor Relations Director Melissa Sherrod spoke to ANC2F, while PEPCO Regional Vice-President Marc Battle spoke to ANC1B.

Exelon announced the $6.8 billion purchase on April 30. See an article about the deal from the Forbes magazine website here.

PEPCO Holdings also operates Delmarva Power & Light Company and Atlantic City Electric Company. The two companies will have to receive permission to merge from many government agencies, including public service commissions in DC, Maryland, and Virginia, and from the New Jersey Department of Law and Public Safety.

Cooper told ANC2F the local filing would be in mid-June.

The two presentations were largely the same. The companies must demonstrate the sale will benefit the public. The PEPCO name and local headquarters will remain the same, and all labor agreements will be honored for two years. The new company will be committed to a major project of burying electric power lines underground.

At ANC1B, a commissioner asked where the burying of lines will take place.

Battle apologized in advance for a vague answer, and then said the burying of lines would take place in "areas of greatest need".

"When it's done, outages will be reduced by 90 percent," Battle said.

Battle estimated the merger of the two companies would save $50 million per year by increased efficiencies in executive leadership and front office, including downsizing legal departments and accounting. In response to Commissioner questioning, Battle said he did not anticipate anybody involved with getting power to customers (e.g., technicians, maintenance personnel) would get laid off.

At ANC2F, a member of the audience asked what percent of the electricity Exelon now generates comes from nuclear power. Melissa Sherrod put the amount at about 60 percent, and said Exelon is the largest nuclear operator in the US.

"We made a conscious decision to divest from coal," Sherrod said.

At the same meeting, Cooper spoke about her background. She is originally from South Carolina, she came "from academia", and has been working for PEPCO for six years. She also said she had worked for the DC Council.

A 2007 Washington Post article notes the appointment of a Donna Cooper to the staff of Mayor Vincent Grey as Director of Policy. Cooper also worked for former Councilmember Vincent Orange, the article says.

Nevertheless, some of the older people in the audience had a difficult time believing Cooper was President of PEPCO, perhaps because she is youthful-looking.

"You are President of PEPCO?" one asked incredulously.

Cooper confirmed she was, in fact, President of PEPCO.

A Washington Post article here speculates on what the proposed merger might mean for PEPCO customers.