D.C. Mayor Muriel Bowser originally opposed a merger between the Chicago-based Exelon company and the city’s current electric provider, Pepco, but now says she supports the deal after more negotiations.
At a Tuesday press conference, Bowser announced that she would support the $6.8 billion merger after Exelon agreed to dump $78 million into social programs for the city, including job training and electricity subsidies for low-income residents.
“We kept the conversations with Pepco and Exelon alive, because we knew we had to do better for the District,” Bowser said in a statement. “My team negotiated a deal that puts District residents and ratepayers first – by delivering a public utility that is cost-effective, dependable and environmentally sound.”
As part of the settlement, Exelon will put up $25 million to make sure D.C. residents don’t see rate hikes until 2019, $15 million for subsidies that will assist low-income residents in paying for electricity and weather-proofing their homes, and more than $5 million to support D.C. jobs programs, the Washington Business Journal reports.
Exelon will also issue a one-time credit to D.C. customers of around $57 each; a total payout of $14 million.
The new agreement still must pass through a board of D.C. regulators who, during the last round of negotiations, unanimously rejected a previous version of the proposal. The company, with the mayor’s support, filed a motion Tuesday to have the commission reconsider the settlement agreement.
When the initial deal was rejected in 2014, the commission said that the deal between the two utilities companies would hurt D.C. residents, but according to Bowser, the new deal is in their favor.
Bowser said the agreement will benefit the city by lowering utility rates, increasing jobs, and forcing the energy company to make $17 million worth of “green energy investments.”
Critics say the merger will do the exact opposite, forcing D.C. residents to pay higher rates for worse service.
Allison Fisher, a spokesperson for Public Citizens Energy Program, said Bowser is wrong to claim the deal with Exelon is good for D.C. residents and keeping the deal alive “puts corporate profits ahead of the public interest.”
“The mayor is touting this settlement as a remedy to the proposal that the PSC rejected for failing to be in the public interest. It is not a remedy,” Fisher said in a statement. “The new settlement terms are only modest, superficial changes that fall far short of the PSC’s mandate that the merger serve the public interest.”
Fisher said the problem isn’t so much the deal, but Exelon’s business model, which focuses primarily on a national market rather than District residents.
Reaction to the announcement came swiftly on Twitter from community activists and at least one D.C. council member.
Let's not accept the terms of a shortsighted deal. Stand firm & voice your continued opposition to PSC #StopExelon pic.twitter.com/NBdp0zvs56
— Mary Cheh (@marycheh) October 6, 2015
Lots of smoke and mirrors, including a $25 million dollar deposit on future rate increases! #stopexelon https://t.co/nZzOIcURs9
— Anya Schoolman (@AnyaSchoolman) October 7, 2015
Can put lipstick on a pig & it's still a pig. This merger was hogwash before & remains hogwash today #stopexelon https://t.co/ZLvAkGN2oZ
— Jason Galanes (@JPGalanes) October 6, 2015
Additional money in new "deal" will end up being paid by ratepayers down the road. #stopexelon
— Power DC (@PowerDCnow) October 6, 2015
Bowser’s deal did receive support from one unlikely ally. Republican D.C. Council candidate Dave Oberting told The Daily Caller News Foundation the deal could serve as a signal to outside businesses that the city is ready to start doing business.
“Most foreign investment occurs through mergers and acquisitions. If this merger had not been allowed to proceed, it would have sent a message to investors around the world that the District is hostile to foreign investment,” he said. “It took the mayor a while to get there, but she ended up in the right place.”
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