In Maryland and the District of Columbia, it would be hard to find a company more hated by consumers than Pepco. At PJM, consumers have had few better allies.
State regulators have no vote in the PJM stakeholder process although they frequently take part in debates. Consumer advocates for nine states and the district vote in the End User Customer sector. [Editor’s Note: An earlier version of this story misstated consumer advocates’ voting rights.]
Aside from them, it is up to the likes of a few large electric cooperatives and coalitions of municipal utilities and industrial consumers to speak up for “load.”
Having divested its generation, Pepco has more in common with Old Dominion Electric Cooperative and Lavallette, N.J., than generation owners such as Exelon. As a result, Pepco representatives Gloria Godson and John Brodbeck have often sided with load against supply.
“We’re on the side of the angels here,” Godson told state regulators last year at a meeting of the Organization of PJM States Inc. during a discussion on demand response’s role in the capacity markets. “We are working to implement your public policy objectives and change consumer behavior.”
Pepco will lose its independent voice with its acquisition by Exelon. While Pepco representatives may attend stakeholder meetings and vote at the lower committees, the company will lose its voting privileges at the senior Markets and Reliability and Members committees.
One of 46 Electric Distributor sector members, Pepco will be absorbed under Exelon Business Services Co. Although Exelon is a member of the Transmission Owner sector, its voting preferences are often driven by its generation holdings. Its representatives have been among the leaders of those urging limitations on demand response and other changes to increase prices in the energy and capacity markets.
Federal Energy Regulatory Commission rules prohibit utility holding companies such as Exelon from cross-subsidization or collusion among their subsidiaries — for example, barring the sharing of market-sensitive information between transmission and merchant functions.
The Pepco acquisition raises a more subtle risk, said Dan Griffiths, executive director of the Consumer Advocates of PJM States (CAPS).
“It has to do with the diversity of options,” he said, citing ideas on fulfilling state energy efficiency obligations. “You will see things conforming that might not have in the past. When the voices are silenced, they’re silenced forever.”
The impact was illustrated last October, when Walter Hall, of the Maryland Public Service Commission, told stakeholders that Exelon’s Baltimore Gas & Electric shared Pepco’s concerns over the impact of PJM’s revised rules on state demand response programs.
At a subsequent meeting, Exelon’s Jason Barker told stakeholders that he had a letter from BGE. (See Too Many Choices: DR, Auction Changes Go to Vote.)
BGE is just fine with the changes, he said.
See related stories:
- States, not FERC, will be Challenge for Exelon-Pepco
- Exelon: Pepco `The Right Deal at the Right Time’
