By Suzanne Herel

Exelon on Monday asked the D.C. Public Service Commission to reconsider its rejection of the company’s proposed $6.8 billion acquisition of Pepco Holdings Inc.

The filing came as D.C. Mayor Muriel Bowser’s office confirmed that it is seeking to negotiate a settlement with the companies. “We are engaged in substantive discussions with the companies on a settlement agreement that would address, in a new application, the administration’s concerns,” City Administrator Rashad Young, who is leading the negotiations, said in a statement. “Any settlement agreement would be presented to the PSC for review, public comment and final determination.”

In a radio interview Sept. 25, the day after opponents of the deal rallied outside her office, Bowser had declined to confirm whether she was engaged in negotiations. (See DC Mayor Tight-Lipped on Exelon-Pepco Deal.)

Exelon’s appeal, submitted on the last day of the 30-day appeal period, takes issue with two of the PSC’s findings: that the merger was not in the public interest and that it would not be in the public interest for the commission to identify additional conditions that could make it so.

The 43-page filing maintains the commission’s ruling contained “various errors of law” and reiterated the benefits that the company said the district would receive, quoting at length from CEO Christopher Crane’s direct testimony. (See CEO Crane to DC PSC: Exelon Committed to Jobs, Ratepayers.)

Exelon said the merger would “yield tremendous benefits by unlocking millions of dollars of synergy savings; facilitating the sharing of best practices; enhancing the reliability of service; ensuring the continuity of a skilled workforce; creating net positive job growth in the District of Columbia; guaranteeing Pepco’s active participation in and support of the District of Columbia’s many civic and charitable organizations; and providing Pepco and the District of Columbia with a partner uniquely well-suited to help the District of Columbia advance its sustainability goals quickly and effectively.”

Crane referred to the negotiations with Bowser’s office in a press release late Monday. “Since the Public Service Commission explained why it didn’t approve the merger last month, we’ve worked to learn what’s most important to the district – and we are responding,” Crane said. 

“Exelon’s attempt to breathe new life into its takeover of Pepco should be rejected by the D.C. Public Service Commission,” the opposition group Power DC responded. “The PSC unanimously rejected Exelon’s attempt to buy Pepco in August for a very simple reason: the merger is not in the public interest. Nothing Exelon said today will change that fact. Exelon’s business model is fundamentally at odds with the district’s ability to control its own power supply.”

In making its decision last month, the PSC said it weighed the proposal on seven factors of public interest, among them the effects on ratepayers and shareholders, market competition and preservation of natural resources and the environment. (See DC Halts Exelon’s Acquisition of Pepco Holdings; Pepco Stock Tumbles.)

More than half of the Advisory Neighborhood Commissions and nearly half of the 12-member City Council remain opposed to the deal. The Office of People’s Counsel and the attorney general’s office also have advised against approval without significant concessions.

The acquisition was approved by regulators in all remaining jurisdictions: New Jersey, Maryland, Delaware, Virginia and FERC.