By Michael Mariotte

It hasn’t been a very good week at Exelon headquarters near Chicago. First, four of its reactors–from New Jersey to Illinois, couldn’t clear the PJM capacity auction, putting their future in jeopardy. And this morning came the worst news of all for the company: The Washington DC Public Service Commission unanimously rejected its attempt to take over the local utility Pepco.

Even though four states and FERC (Federal Energy Regulatory Commission) had already approved the deal, approval from all jurisdictions involved is essential to allowing the deal to go through, so DC’s action–if it stands–will kill the deal entirely.

In Maryland, where the PSC voted 3-2 to approve the deal, with conditions, a few months ago, Attorney General Brian Frosh is continuing a legal case to attempt to force the PSC to reconsider its decision. The DC decision may give new impetus to that case, and may give grounds for the Maryland PSC to do exactly that: reconsider its narrow decision.

Exelon officials initially had thought the Maryland PSC would be its biggest obstacle, so breathed a sigh of relief when the deal squeaked through there. But grassroots activism is alive and well in DC, and a strong coalition under the banner PowerDC was formed to educate, organize and mobilize the public. And they did just that. Full disclosure: NIRS was part of PowerDC.

While the DC vote was 3-0 against the decision, one commissioner dissented from the actual order the commission released (a summary of the order is here). He said he would have offered Exelon some possible conditions it would have to meet if it wanted to submit a revised application. As the order stands, however, the majority did not offer any conditions or possibilities in which it might accept the deal–making a reversal of its decision highly unlikely.

That, however, is just about Exelon’s only course of action if it wants to try to salvage the deal. Exelon and Pepco can, and likely will, ask the PSC to reconsider its decision based on the current application. That is surely a losing road, given the PSC’s complete rejection of it. Then, Exelon can either try going to court, and/or can submit a revised application.

But since the PSC’s grounds for rejecting the deal are so fundamental–the two main reasons are that Pepco would become just a cog in Exelon’s much larger machine and thus would become impossible for the PSC to regulate, and that an Exelon takeover would stymie renewable energy development in the city–that it is difficult to imagine what Exelon could do differently to appease the PSC.

As PSC Chair Betty Ann Kane, a former DC councilmember, wrote, “Unlike a rate case, this decision will effect a permanent change in the ownership and control of the District’s local electric distribution company. A rate case decision lasts only until the next rate case. This decision is forever.”

That doesn’t sound like a PSC ready to reconsider its decision.

It probably didn’t help Exelon’s case that the company has been overtly …read more

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