The settlement reached between D.C. Mayor Muriel Bowser and Exelon contains provisions designed to persuade the Public Service Commission to approve the company’s acquisition of Pepco Holdings Inc. If the deal is approved:

• Exelon will provide a Customer Investment Fund worth $72.8 million. The fund is broken down as follows:
  • $25.6 million in rate credits against any future rate increases.
  • $14 million toward one-time, direct credits to all customers (estimated at $57 per customer).
  • $3.5 million for a Renewable Energy Development Fund.
  • $3.5 million paid to D.C.’s Sustainable Energy Trust Fund, which helps residents and businesses use renewable energy, increase energy efficiency and reduce overall energy consumption.
  • $10.05 million paid to D.C.’s Consumer and Regulatory Affairs Green Building Fund.
  • $16.15 million toward low-income residential customer assistance: forgiveness of debt that is more than two years old ($400,000); funding to customers eligible for the federal Low Income Home Energy Assistance Program ($9 million); and funding for the district’s energy efficiency programs, such as its home-weatherization program, earmarked for low-income residents ($6.75 million).
• Exelon will also contribute $5.2 million to the district’s workforce development programs.
• Exelon will move part of its corporate headquarters from Chicago to the district. This includes moving the offices of the CFO and the chief strategy officer. The executives must spend the majority of their office hours in the district.
• Exelon will move Pepco Energy Services from Arlington, Va., to D.C.
• Pepco will hire at least 102 union workers in the district within two years of the merger’s close.
• Pepco must exceed the PSC’s current reliability requirements. Failure to do so will result in self-imposed fines, up to $6 million, paid to the Sustainable Energy Trust Fund.
• Pepco will develop an “action plan” to improve its customer satisfaction ratings.
• Ring-fencing provisions: “Pepco will maintain its separate existence as a separate corporate subsidiary and its separate franchises, obligations and privileges.” Pepco will not be liable for any debt related to the merger or any future Exelon acquisition. Exelon and Pepco will use “separate legal and government-affairs personnel, support personnel, and separate law firms and consultants to advocate before the commission.”
• Pepco, Atlantic City Electric, Baltimore Gas and Electric, Delmarva Power & Light and PECO Energy will remain PJM members until at least the end of 2024. Exelon will also make a one-time contribution of $350,000 to the Consumer Advocates of PJM States.
• By the end of 2018, Exelon will develop or assist in developing at least 10 MW of solar generation in D.C. Exelon will also provide $5 million in “capital to creditworthy governmental entities at market rates for the development of renewable energy projects” in D.C.
• Pepco will develop and interconnect at least four microgrid projects.
• Exelon will enter into power purchase agreements with at least 100 MW of wind energy projects in PJM.

— Michael Brooks