Regional Solar Association Surprised and Disappointed by PSC Decision to Approve Exelon-Pepco Merger

WASHINGTON - May 15, 2015 - PRLog -- Today, the State of Maryland’s Public Service Commission, in a three-to-two decision, approved the Exelon-Pepco merger over the objections of MDV-SEIA and other Maryland energy industry stakeholders.  We are extremely disappointed by the Commission’s decision to vote in favor of this merger.  MDV-SEIA, along with stakeholders that included the Maryland Energy Administration, Attorney General, Office of People's Counsel, and Commission Staff, had raised concerns during the course of the proceeding as to the public interest of the merger.

MDV-SEIA concurs with the reasoning of the two dissenting commissioners, Williams and Hoskins, who in their dissent, correctly stated that:

...the General Assembly has placed on the Applicants the burden of demonstrating that a change in corporate ownership is in the public interest with benefits and no harm to consumers. The proposed merger of Exelon and PHI fails that standard. The merger will impose substantial competitive harm to Maryland’s electricity market, by eliminating across-the fence competition, silencing PHI’s unique non-generation voice, and chilling innovation in new energy-related technologies and products. …[T]he merger is inconsistent with the public interest, as evidenced by the chorus of voices that have opposed it, not just because it contains a severe inequity between shareholder and ratepayer benefits, but also because the transaction fails to embrace innovative utility of the future strategies.

Our industry, which supports more than 3,000 jobs across Maryland, will now face a steeper uphill battle in the state legislature. As MDV-SEIA and other interested parties pointed out in their testimony, Exelon has clearly indicated that it views each deployment of distributed generation as a loss of revenue - and thus it will be in Exelon’s interest to prevent as much of it as possible. While we sincerely hope this will not be the case, our organization has significant concerns regarding interconnection, attacks on net-metering, and other tactics which Exelon may utilize to slow solar deployment in the region. By approving the merger, the Commission has injected uncertainty in the future direction of what, until now, has been a growing renewable energy industry in Maryland.

The concessions that were imposed by the Commission in an attempt to preserve solar deployment are purely cosmetic.  Across two commitments, the merged applicant will be required to develop a mere 15 MWs of additional solar supply in the next 3 and a half years - roughly the amount of solar being already deployed in Maryland every 4 months, or 1% of the state’s 2020 requirements.  That minimal solar (plus 5 MWs of solar “or other Tier 1 renewables”) will be additional to the state’s existing requirements - for two years - unless the Commission makes a determination it need not be, according to a vague “good cause” standard.    All of this presumes the commitment is honored in a timely fashion - the 20 MWs Exelon was required to build by the end of 2015 under its previous massive merger is still not in commercial operation today.

Exelon/PHI have until May 26th to notify the Commission of acceptance of the conditions. The State (MEA), Attorney General, Office of People's Counsel, and Commission Staff who were among parties opposing the merger have 30 days to consider an appeal.  We sincerely hope that the State will consider filing an appeal.  The merger also remains subject to approval by the District of Columbia Public Service Commission, which has not yet issued an order in the DC proceeding.