District officials have urged regulators to demand more public accountability from a proposed multibillion-dollar acquisition of the city’s utility provider, saying Pepco and Chicago-based energy giant Exelon have overstated benefits of a proposed merger.
The D.C. Attorney General’s office last week filed a lengthy letter with regulators opposing the $6.8 billion deal, saying benefits could flow from D.C. ratepayers to shareholders of the Illinois company.
The attorney general’s office also called some of the promises the two companies made regarding future electricity rates and reliability in the District “illusory.” The letter listed 40 conditions that the D.C. Public Service Commission should demand before approving the merger.
Neither “retail electricity consumers, or the District itself, will be better off with the merger than without it,” read the letter signed by a deputy to D.C. Attorney General Karl A. Racine. Racine and his top deputy, Natalie Ludaway, have recused themselves from the issue because their former law firms conducted work on behalf of Pepco.
Michael Czin, a spokesman for Mayor Muriel E. Bowser, said the letter spoke for the District.
D.C. politicians cannot approve or stop the deal, but the proposal has put a spotlight on city politicians’ close relationships with the company. Lawmakers in the District have until recently been the quietest among the three jurisdictions that must approve the merger.
Bowser’s senior adviser, Beverly Perry, is a former Pepco vice president. D.C. Council Chairman Phil Mendelson has been criticized for voting on matters involving Pepco in the past because of his stock holdings in the company.
Almost half the D.C. Council and more than half the city’s neighborhood commissions have come out against the deal in recent weeks, with many questioning Exelon’s stake in 14 nuclear power facilities and a record of opposing renewable energy produced from competitors.
In recent weeks, Exelon and Pepco have stepped up efforts on social media to advance the deal. In a series of tweets, Exelon has said the merger would improve storm response and reliability in the District.
The letter from assistant attorney general Brian R. Caldwell disputed those assertions. But it also appeared to give the merger a path forward — with restrictions. Those include allowing city regulators to force Exelon to spin off Pepco in the event of a nuclear accident. D.C. also wants employees in the District to retain their jobs and Exelon to hold regular shareholder meetings in the city.