As a resident of the District of Columbia and owner of a small place in Delaware, I have an interest in the proposed Pepco Holdings Company/Exelon merger. Not being familiar with all the intricacies of the delivery of energy, it sometimes seems our elected officials are simply debating the size of the bribe being offered the District in exchange for its approval of the merger. Some may resent these so-called benefits being called a bribe but since they are up for negotiation and have a cash value it seems an appropriate term to use.
There have been a number of ads recently in the Washington Post, paid for by Exelon, trying to convince readers to put pressure on the Public Service Commission to approve the merger. The most recent ad featured the smiling faces of former Mayor Anthony Williams, now CEO of the Federal City Council, and Jim Dinegar, president and CEO of the Greater Washington Board of Trade, and is headlined “Only the Merger Provides $78 million in Benefits.” While that may sound like a lot of money, consider that in 2015 Exelon had revenues of $29.4 billion. That number no longer looks so generous. While having the greatest respect for Anthony Williams (I tried to convince him to run for a third term) you have to wonder if support even from someone of his stature will be enough to get people to buy into this merger.
The ad claims the merger would result in “fewer and shorter power outages and support for renewable energy,” something Pepco has promised to do on its own. The Pepco website claims “We are upgrading our electric system to make it more reliable, and we’re excited to have our customers start to see the benefits of our work. Our work and commitment has significantly reduced both the frequency and duration of power outages. From December 2010 to January 2015, outages on feeders that we worked on as part of our Reliability Enhancement Plan decreased by 51 percent and the outages that did occur were 60 percent shorter.” Based on this, we must question how a merged company would do better. Are there penalties if it doesn’t? What recourse do customers have the next time there is a major storm and people lose power for days on end; can we reverse the merger? The ad says Pepco will hire another 100 union workers. Is there a date certain for them to do this and who will monitor to ensure Pepco always has 100 more union workers than it has now?
We have seen ads funded by Exelon listing support for the merger from non-profits in the District of Columbia. I am a member of one of those organizations and asked the CEO how the organization agreed to have its name in that ad. Were they promised money? Did the board or membership vote on this? The answer to these questions was no and it made me question what happened in all the other organizations listed.
Pepco was incorporated in 1896. As a subsidiary of Pepco Holdings, Inc. (PHI), it claims to deliver safe, reliable electric service to more than 815,000 customers throughout Maryland and the District of Columbia. It proudly claims in the last five years to have donated more than $10.5 million to 2,100 local organizations. Do we subtract that amount from the $78 million promised making it really only $68 million in new benefits? Pepco Holdings, Inc. (PHI) is one of the largest energy delivery companies in the mid-Atlantic region and serves about two million customers in Delaware, the District of Columbia, Maryland and New Jersey. PHI subsidiaries Pepco, Delmarva Power and Atlantic City Electric provide regulated electricity service; Delmarva Power also provides natural gas service. PHI also provides energy efficiency and renewable energy services through Pepco Energy Services, which is a provider of deregulated energy and energy-related services for residential, small business and large commercial customers. Will that company grow under the merger with Exelon, which is a Fortune 150 company working in every stage of the energy business? That includes, according to their website, power generation, competitive energy sales, transmission and delivery; doing business in 48 states, D.C., and Canada and employing 30,000 people nationwide.
As a citizen who pays bills from PHI companies in two locations, these ads don’t provide enough information to decide whether or not to support the merger. The offered bribe doesn’t seem quite big enough.
Peter Rosenstein is a longtime LGBT rights and Democratic Party activist. He writes regularly for the Blade.