By Suzanne Herel

Exelon spokesman Paul Elsberg confirmed last week that the concessions the company agreed to in its bid to win D.C.’s approval of its takeover of Pepco Holdings Inc. could result in changes to the deals already struck with Delaware, Maryland and New Jersey.

“The most-favored-nations clauses in other jurisdictions that have already approved the merger proposal … would be triggered by a final order from the Public Service Commission of the District of Columbia approving the merger,” he said. “The existing approvals are not contingent on the result of the MFN, although once the D.C. PSC issued its order, we would return to the other commissions to true up our merger packages in their jurisdictions.”

Elsberg said the company did not have an estimate of how much the cascading concessions would cost.

Exelon and Pepco had estimated that accepting all of the district’s demands would have boosted the cost of the proposed transaction to $7.35 billion to $8.75 billion, according to the PSC’s Aug. 27 order rejecting the merger.

“That was the PSC’s estimate based on a different set of proposals, and not the settlement with the District of Columbia government,” Elsberg said. “Regrettably, we do not have an estimated cost based on the current settlement.”

In its settlement with D.C., Exelon pledged $72.8 million in a Customer Investment Fund (CIF), which the company says results in $215.94 in benefits per customer, based on 337,117 customers. The MFN provision, identical for each jurisdiction, requires that Exelon increase each jurisdiction’s CIF so that the benefits per distribution customer are equal.

Based on estimates of each jurisdiction’s number of residential customers, the settlement could increase Exelon’s total contribution to the CIFs by more than $100 million. (See chart.)

Some state regulators, however, say they believe the MFN provisions applies to more than just the CIFs and include other benefits.

Roger Berliner, a regulatory attorney and Montgomery County councilman who led opposition to the merger in Maryland, said no amount of new benefits afforded his state would make it a deal that would be in the public interest.

But, he said, “Will I want to make sure if, in fact, there are things that have been offered to D.C. that should now be reflected in what Maryland consumers can get? Absolutely. I want everything we can get out of this.”

That includes the $5.2 million Exelon has offered for workforce training. “I promise we’ll be knocking on that door,” he said.

Delaware, as well, has its eyes on D.C.

“The plan all along was to have the commission review the settlements from all the jurisdictions regarding the most-favored-nation [status] and kind of see where we match up compared with what other jurisdictions got, so I think it’s potentially impacting Delaware,” PSC spokesman Matt Hartigan said. “Depending on what the final order says from D.C., that might result in more benefits, but it’s a little premature to say at this point.”

Stefanie Brand, director of the New Jersey Division of Rate Counsel, opposed the merger and still has concerns over issues like ratepayer protections and promises of reliability. But, she said, an approval in D.C. likely would mean more money for New Jersey customers.

“We don’t really know how it’s going to shake out,” she said.