By Suzanne Herel

Exelon’s proposed acquisition of Pepco Holdings Inc. has been re-energized by the D.C. Public Service Commission, which unanimously agreed to reopen the case and denied intervenor status to a group that wants to buy PHI’s district assets.

The companies also won approval of an expedited timeline for reconsideration, with closing briefs due Dec. 18.

On Oct. 30, regulators rejected a late request to intervene by D.C. Public Power, a newly formed advocacy group that has proposed to buy Pepco’s district holdings post-merger and create a non-profit utility. (See Group Proposes to Buy Pepco DC’s Assets.)

“We are obviously disappointed with the PSC’s decision, and at this time we are evaluating our options and considering what’s next,” CEO Michael Overturf said.

Meanwhile, seven of the D.C. Council’s 13 members have sent a letter to the PSC adding their support to a settlement agreement brokered by Mayor Muriel Bowser’s administration that would offer the district $78 million in public benefits.

The letter, dated Oct. 16, was not posted to the PSC site until after the commissioners voted Oct. 28 to reopen the matter. Among the signers were council members Brianne Nadeau and Brandon Todd, who previously had expressed to the PSC their opposition to the deal.

Nadeau posted the letter to her website, saying she had “decided to support the proposed settlement, which addresses her original concerns by protecting ratepayers through early 2019, providing assistance for low-income citizens and including a commitment to expand solar and wind power along with millions to support additional renewable energy development.”

Neither the council nor the mayor has a formal role in the decision-making process. The three-member commission unanimously rejected the merger in August, ruling that it was not in the public interest. However, Commissioner Willie Phillips issued a partial dissent, saying he was “disappointed in the loss of the many opportunities” the merger could have brought the district. (See Mayor’s Settlement Puts DC PSC on the Spot in Exelon-Pepco Deal.)

The acquisition already has been approved by FERC and regulators in Delaware, Maryland, New Jersey and Virginia. In Maryland, however, the Office of People’s Counsel is trying to get a court-ordered review of the PSC’s decision. That effort was joined by Attorney General Brian Frosh, who filed an amicus brief in Queen Anne’s County Circuit Court on Oct. 28.

In agreeing to reconsider the merger in the district, PSC Chairwoman Betty Ann Kane said, “We will be releasing more of the details of the process, but we are all committed to seeing that this proceeds in a manner that is open, that is transparent, that is fair and that gives the commission the information and the opportunity that it needs to make a decision on whether this proposal is in the public interest.”

While winning over a number of former critics, notably People’s Counsel Sandra Mattavous-Frye and Attorney General Karl Racine, the settlement failed to garner the support of intervenors representing environmental and green energy interests. They say the fundamental conflict between Exelon’s commitment to its merchant generation and the district’s move toward renewable energy — a concern cited by the PSC in its denial — remains.

Exelon and Pepco requested a 150-day timeline for consideration of the revised deal. If the acquisition doesn’t close by Dec. 31, Exelon must buy back $2.75 billion of debt it financed to pay for the takeover at $1.01 on the dollar, CEO Christopher Crane recently told Bloomberg. Meanwhile, the company is paying $10 million per month in interest on the bonds it sold in June.

Crane also said that Exelon might walk away from the deal if it is not approved within five months.

Power DC, a coalition of public interest groups opposed to the merger, expressed disappointment with the PSC’s decision to reconsider the merger and the approved timeline. It had asked the PSC to take until June 30 to provide ample time for public input. With more than 3,000 comments, the deal has attracted the most public participation of any issue in the PSC’s history of more than a century.

“Exelon’s latest settlement offer still does not address the fundamental conflicts of interest identified by the PSC when it rejected the merger in August,” Power DC said in a statement after the Oct. 28 vote. “We will continue to work tirelessly over the coming weeks to ensure that the people are protected from this bad deal for D.C.” (See Merger Opponents Question Pepco’s Tactics.)

Expectedly, PHI was pleased with the vote.

“The procedural schedule approved by the commission has reply briefs filed on Dec. 18, which would allow for the commission’s decision sometime in the first quarter of 2016,” said Myra Oppel, PHI’s vice president for regional communications. “The schedule affords all parties and the public a fair opportunity to present their positions and ensures that the commission has a complete record to render its decision.”

The new timeline called for testimony supporting the settlement agreement to be filed by Oct. 30. District Department of the Environment Director Tommy Wells, the D.C. government, Exelon and Pepco, the Apartment and Office Building Association, the D.C. Water and Sewer Authority, the National Consumer Law Center, the National Housing Trust, the National Housing Trust-Enterprise and the Office of People’s Counsel submitted hundreds of pages of direct testimony.

The new filing deadlines are as follows:

• Nov. 6: Data requests to settling parties regarding settlement agreement and supporting testimony.
• Nov. 13: Settling parties’ responses to data requests regarding settlement agreement and supporting testimony.
• Nov. 17: Non-settling parties’ testimony.
• Nov. 20: Data requests to non-settling parties regarding settlement agreement and supporting testimony.
• Nov. 25: Non-settling parties’ response to data requests regarding settlement agreement and supporting testimony.
• Dec. 2-3 and possibly Dec. 4: Public interest hearings.
• To be announced: Community hearing.
• Dec. 11: Initial briefs.
• Dec. 18: Reply briefs.