Pepco Holdings Inc. and Exelon Corp. reached a settlement with the government of the District of Columbia and others on the companies’ proposed merger that will deliver substantially enhanced benefits to consumers and businesses in the District.
The settlement package was specifically shaped to address the concerns articulated by the District of Columbia Public Service Commission (PSC) in its August order.
The new package of benefits includes commitments to provide bill credits, low-income assistance, fewer and shorter outages, a cleaner and greener Washington, D.C., and investment in local jobs and the local economy. Pepco Holdings and Exelon submitted the settlement agreement to the PSC for approval as part of the existing merger proceeding.
Also signing on to the settlement agreement are the Office of the People’s Counsel and the Office of the Attorney General of the District of Columbia, as well as the Apartment and Office Building Association of Metropolitan Washington, the District of Columbia Water and Sewer Authority, the National Consumer Law Center and the National Housing Trust.
“We heard the Public Service Commission’s concerns loud and clear, and this new merger proposal presents greater benefits to the District,” said Chris Crane, president and CEO of Exelon. “Our settlement includes more than 120 commitments to ensure the merger is unequivocally in the public interest.”
“The District deserves a healthy utility company that guarantees affordability, reliability and sustainability for residents and ratepayers,” said District of Columbia Mayor Muriel Bowser. “We kept the conversations with Pepco and Exelon alive, because we knew we had to do better for the District. My team negotiated a deal that puts District residents and ratepayers first — by delivering a public utility that is cost-effective, dependable and environmentally sound.”
Under the new proposal, Exelon will more than double direct benefits to customers by providing $72.8 million for bill credits, low-income assistance, renewable energy and energy efficiency programs in the District. These funds are expected to offset distribution rate increases for residential customers through March 2019. Of the direct funds provided, $16.15 million would be used to help low-income customers.
“This new proposal meets the needs of families and businesses in the District,” said Joseph Rigby, chairman, president and CEO of Pepco Holdings. “Merging with Exelon is the only way to provide Pepco customers and communities these significant benefits, which we believe are too great to forfeit.”
Todd Nedwick, Housing and Energy Efficiency Policy Director, National Housing Trust, said, “The settlement announced today provides meaningful benefits to vulnerable, low-income District residents. The settlement provides at least $6.75 million for energy efficiency retrofits to make multifamily homes healthy and affordable. Energy efficiency in affordable housing lowers utility costs, keeps housing affordable and reduces greenhouse gases. A triple win.”
Pepco and Exelon have committed to invest substantially in advancing the District of Columbia’s long-term sustainability goals, including $3.5 million for new renewable energy and $3.5 million for energy efficiency programs. In addition, Exelon will expand solar energy in the District by developing up to 10 MW of new solar power and making it easier and faster for customers to install solar panels.
Exelon will provide another $5 million of capital to governmental entities to develop renewable energy in the District and will purchase 100 MW of wind energy. In addition, Pepco will work with the District to develop at least four new microgrids.
Under the enhanced proposal, Pepco will reduce the frequency and duration of power outages. Pepco’s reliability performance will exceed the standards the PSC has set or the company will face significant financial penalties if it fails to do so. Pepco is expected to reach these more aggressive goals for reliability without increasing planned budgets, providing cost protection to customers.
The new package of benefits also includes commitments by Pepco Holdings and Exelon to promote local jobs and an additional $5.2 million for workforce development in the District.
Exelon also will continue Pepco’s support for the local community by guaranteeing charitable contributions in the District of $19 million over 10 years to nonprofits that serve residents in the District.