By Suzanne Herel

The D.C. Office of the People’s Counsel and the district government asked the Public Service Commission Friday to reconsider its March 23 approval of Exelon’s $6.8 billion acquisition of Pepco Holdings Inc., saying the commission’s rewrite of settlement terms was improper.

Friday was the deadline for the nine parties to the case to request such reconsideration. Aside from OPC Sandra Mattavous-Frye and D.C. Government, the only qualified party to do so was Grid 2.0, which advocates for distributed generation. (See Grid 2.0 Asks DC PSC to Reconsider Merger Approval.)

Exelon and Pepco didn’t wait for the deadline, closing the merger the day of the PSC’s approval. (See Exelon Closes Pepco Merger Following OK from DC PSC.) Last week, Pepco asked Maryland regulators for a 10% rate increase for most of its customers.

Mattavous-Frye said the decision was important for future cases. In her application, she asked that the PSC reopen the record and allow all parties to comment or reject Exelon and Pepco’s unilateral request for adoption of new merger terms as being “procedurally improper.”

“I strongly believe that the manner in which the decision was reached was legally flawed,” she said. “If the flaws in this order are not corrected, it will erode the trust and confidence of consumers and all parties that practice before the commission.”

The D.C. government, in a filing submitted by Attorney General Karl Racine, said, “By unilaterally modifying the terms of the non-unanimous settlement agreement and approving the terms of the revised non-unanimous settlement agreement as a resolution on the merits, the commission committed a series of procedural and substantive errors that require it to reconsider and vacate Order No. 18148.

“The order will have a chilling effect on future settlement negotiations because parties will fear that, in agreeing to proposed settlement terms, they run the risk of the commission proposing and approving alternative settlement terms without the parties’ consent.”

If the PSC does not reconsider and vacate the order, it should reject the merger or approve the non-unanimous settlement agreement subject to “such additional terms as the commission determines will satisfy the public interest,” the filing said.

Mattavous-Frye and the government opposed the initial merger proposal, which the commission rejected last August. They signed on to a later settlement brokered by Mayor Muriel Bowser’s office in October. District officials withdrew their support after two of three PSC commissioners revised that settlement, saying the changes substantially weakened protections for ratepayers.

If the commission stands by its decision, parties may seek relief from the D.C. Circuit Court of Appeals.