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”
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