Maryland regulators should approve Exelon’s proposed merger with Pepco only if its profitability is tied to new standards for reliability, carbon reduction and innovation, a coalition of elected officials and environmental groups said in a filing with the Public Service Commission.

The newly-formed Coalition for Utility Reform filed a petition Wednesday to intervene in the PSC’s review of Chicago-based Exelon’s application to acquire Pepco, the electric utility that serves about 500,000 customers in the Maryland suburbs. The $6.8 billion deal, announced in April, also involves purchases of power companies in New Jersey and Delaware. It would make Exelon the dominant energy company in the Mid-Atlantic area. The process is expected to take 12 to 15 months.

The petition, filed by Montgomery County Council member Roger Berliner (D-Potomac-Bethesda) and Gaithersburg City Council member Ryan Spiegel, argues that the current power delivery system is broken, and that the merger “has profound implications for the state of Maryland.”

“For the residents who have suffered through unacceptably poor service by Pepco throughout the years, this proceeding will determine our fate going forward for decades to come,” Berliner and Spiegel said.

To compel better service, they said, half of the merged company’s return on equity should be contingent on meeting new performance metrics. Among those metrics would be a requirement that within three years the merged company be in the “top quartile” for reliability, as measured by established industry indexes. Conditions should also include ambitious targets for carbon reduction, cost-effective investments in renewables and micro-grids, and “smart grid” technology that gives customers more control over their energy use, the filing said.

Exelon has said it is committed to meeting targets for reducing frequency and duration of outages by 2020. It also said it will establish a $40 million “Customer Investment Fund” that the Maryland PSC can use for energy efficiency and financial assistance to low-income customers.

Coalition members include the cities of Rockville, Greenbelt, College Park and Takoma Park; Environment Maryland and the Energy Future Coalition; and Montgomery County Council members Phil Andrews (D-Gaithersburg-Rockville), Cherri Branson (D-Eastern County) Marc Elrich (D-At Large), George L. Leventhal (D-At Large) and Hans Riemer (D-At-Large).