Exelon and Pepco Holdings announced Wednesday they are sweetening the amount of goodwill money they will give to Maryland utility customers to win passage of their merger, one day after the state’s attorney general formally urged regulators to reject the deal.
Maryland Attorney General Brian E. Frosh filed a 60-page brief with the state’s Public Service Commission arguing that the merger would harm customers and was not in the public interest.
He warned that the deal could hinder efforts to improve service reliability and noted that rate hikes are likely in the future.
“The only significant benefits accrue to Exelon and PHI shareholders and corporate officers—not the State or Maryland customers,” Frosh said in the March 3 brief.
Frosh’s opinion and the companies’ offer to more than double the monetary benefits to consumers comes as the two utilities enter the thick of their regulatory approval process for their proposed $6.4 billion merger.
The companies said Wednesday that they have increased the amount of their proposed “customer investment fund” in Maryland from $40 million to $94.4 million.
The PSC, which has yet to approve the merger, can dedicate the money for customer benefits such as assistance for low-income ratepayers and energy-efficiency programs.
Tyson Slocum, director Public Citizen’s Energy Program, a national consumer advocacy group, said the offer still did not adequately compensate ratepayers.
He called for a $365 million contribution for the Maryland community fund.
The two companies announced April 30 that Chicago-based nuclear energy giant Exelon would be acquiring Pepco Holdings in an all-cash transaction. Pepco Holdings has more than 2 million customers in an arc stretching from the District and its Maryland suburbs to the Delaware shore and north to New Jersey, with each jurisdiction requiring approval by regulators.
Pepco spokeswoman Myra Oppel said the $94.4 million is comparable to what the two utilities are paying in other states.
In the District, the companies boosted their offer from $14 million to $33.75 million.
“A few parties have taken a ‘just say no’ position without considering the tangible, long-term benefits that this merger offers, which says more about their own agendas than promoting the broader interests of the residents and businesses of the state,” Oppel said.
In addition to the PSC, the merger requires approvals by similar agencies in the District and in Delaware.