Approval from the D.C commission would have been the last regulatory hurdle the companies would need to clear in order for the merger to go through, Reuters noted.
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The D.C. Public Service Commission has rejected the proposed merger of Pepco and Exelon this morning, saying that “it is not in the best interest of the people of the District of Columbia”.
The Commission held a vote on the merger in a meeting early Tuesday, with a unanimous decision to reject the proposal.
Commission chairman Betty Ann Kane says the companies did not meet their burden of showing that the proposed merger would benefit the public.
Exelon owns a large fleet of power plants and big utilities that serve the Chicago, Philadelphia and Baltimore areas.
In afternoon New York Stock Exchange trading, Exelon shares were down 3.9 percent at $31.37, while Pepco had fallen 14.7 percent to $22.98. “Pepco would become a second-tier company in a much larger organization whose primary interest is production, not distribution”. They also felt that “management bureaucracy” could constrain Pepco from adapting to current changes in the energy industry. The merger was first announced in April of 2014.
Commissioners said they didn’t like the deal as it was now structured, adding the companies will have 30 days to ask for the commission to reconsider its decision.
“As the Commission recognized in its decision, the proposed acquisition would have been a substantial step backwards in the District’s efforts to move toward more sustainable electricity generation and greater reliance on local, renewable energy”. We will review our options with respect to this decision and will respond once that process is complete.
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“In the end, all of Exelon’s money, lawyers and lobbyists couldn’t mask the overwhelming facts, confirmed today by the D.C. PSC, that this deal would be a boon for Exelon and Pepco shareholders and bad for virtually everyone else”, he said.
