A ma­jor util­ity merger could be short-cir­cuited by D.C.

Util­i­ties ▶ A deal to make a mega-util­ity founders on lo­cal power strug­gles ▶ “Ex­elon and Pepco have tried like crazy to get the deal done”

Bloomberg Businessweek (North America) - - News -

Chicago-based en­ergy com­pany Ex­elon came to Wash­ing­ton in 2014 with a plan to cre­ate Amer­ica’s big­gest util­ity by ac­quir­ing Pepco Hold­ings, which pro­vides power to the District of Columbia and neigh­bor­ing parts of Mary­land, as well as ar­eas of Delaware and New Jersey. But the $6.8 bil­lion takeover has hit an un­ex­pected ob­sta­cle: a lo­cal fight over who gets to con­trol the $78 mil­lion Ex­elon and Pepco have of­fered to hand over as a deal sweet­ener. The dis­pute be­tween Mayor Muriel Bowser, a Demo­crat, and the lo­cal util­i­ties reg­u­la­tor, the District of Columbia Pub­lic Ser­vice Com­mis­sion, could kill the deal.

On March 7, Ex­elon, the big­gest U.S. nu­clear en­ergy op­er­a­tor, and Pepco in­tro­duced a last-ditch pro­posal that in­cluded a plan for meet­ing en­vi­ron­men­tal tar­gets and freez­ing res­i­den­tial rates un­til 2019. The com­pa­nies asked for a fi­nal de­ci­sion by April 7.

Ex­elon Chief Ex­ec­u­tive Of­fi­cer Chris Crane wants to add Pepco’s steady, reg­u­lated earn­ings to off­set losses at some of his com­pany’s nu­clear power plants. “We think this deal is the right deal at the right time for Ex­elon,” he said when he an­nounced the merger in 2014. Ex­elon and Pepco won

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