Environmental advocates lined up Friday to blast Pepco’s proposed merger with a larger company, arguing at a D.C. Council hearing that the $6.8 billion deal with Chicago-based Exelon would undercut efforts in the District to promote renewable energy.
The activists spoke out at a time when the District’s utility regulator, the D.C. Public Service Commission, is in the middle of a months-long review of the proposed acquisition. The D.C. Council has no formal role in approving the deal, but the city government is a party in the regulatory proceedings and could press to oppose or place conditions on the deal.
The objections aired Friday surrounded Exelon’s reliance on its power-generation business for profits — including the nation’s largest fleet of nuclear power plants. Numerous people said that the company’s dual role as a generator and distributor of power would make it less inclined to support “distributed power” initiatives — such as rooftop solar installations — that they say represent the future of green energy.
“They view renewable power and sustainability as a threat to their core business of selling electricity,” said Larry Martin, a representative from the D.C. chapter of the Sierra Club. “This merger is not contributing to the public interest.”
The activists found a sympathetic ear in Mary M. Cheh (D-Ward 3), who leads the council’s Committee on Transportation and the Environment. At the close of the hearing, she said she was increasingly skeptical that the merger could be structured in a way that would benefit D.C. residents.
“If anything, I’m more worried and more concerned,” she said.
Should the merger go through, the utilities have said they would spend $100 million, including $14 million in the District, on customer benefits. Those could include bill rebates for ratepayers.
But Cheh said she wasn’t sure that any amount of money or any number of negotiated stipulations could overcome her doubts about selling Pepco to a power-generation company.
“I would be very wary of accepting limitations that expire, because once they expire, we’re done in terms of our ability to control things,” she said. “I’m now quite skeptical that we can wordsmith our way around the core conflict that faces us.”
Unlike Exelon, Pepco Holdings Inc. isn’t in the power-generation business, having sold most of its power plants more than a decade ago.
Under pressure from activists and government, Pepco in recent years has moved to comply with District standards for renewable power sourcing and to embrace distributed power initiatives. That includes “net metering,” which allows owners of solar installations to offset their power bills for the energy they produce but do not consume, sending it back into the electrical grid.
“We see Pepco as a partner,” said John MacGregor of D.C. Climate Action. “We may wish for faster action, but they’re not an opponent.”
Anya Schoolman, a veteran solar energy advocate, said she detected a cooling off of Pepco’s interest in distributed power after the Exelon proposal was announced last year, amid negotiations over rules for net metering and other initiatives.
“All of a sudden, they’re acting like a different entity,” she said. “Was it a new boss? A new policy direction? I don’t know.”
Exelon spokesman Paul Elsberg defended the company’s ecological commitment in a statement, saying that Exelon is “conducting its business in ways that minimize environmental impacts and has focused on being a low-carbon company since its formation.”
“Exelon supports customers who embrace distributed generation, such as rooftop solar, fuel cells and battery storage, to take more control of how their energy is produced and supplied,” he said.
Elsberg’s statement acknowledged that the company has objected to aspects of net-metering laws in other jurisdictions, saying it opposed “policies that shift the costs of using and maintaining the electric grid from customers who own distributed energy to others, who are often least able to afford the technology.”
Representatives from Pepco, Exelon, the PSC and the District’s Office of the People’s Counsel, which independently represents ratepayers, did not testify after another council member, Vincent B. Orange (D-At Large), threatened to exclude them from his own committee’s Jan. 29 hearing on the merger if they appeared at Cheh’s hearing.
“The undercutting of the jurisdiction of the Committee on Business, Consumer and Regulatory Affairs will not be tolerated,” Orange wrote in a Jan. 16 memorandum, citing council rules giving his panel oversight over the PSC.
Elsberg said that Exelon and Pepco representatives are scheduled to testify at the Jan. 29 hearing. Orange, who worked as a Pepco executive from 2007 to 2010, did not respond Friday to messages seeking comment.