OPC Files Appeals Court Brief Challenging Pepco-Exelon Merger


Washington, D.C. -- DC People’s Counsel Sandra Mattavous-Frye filed a brief with the DC Court of Appeals Monday laying out why the Public Service Commission’s (PSC) March 23, 2016 decision to approve the Pepco-Exelon merger was legally flawed. In its strong advocacy for District consumers, the Office of the People’s Counsel (OPC) is asking the Court to send the case back to the Commission and provide OPC with an opportunity to argue for the restoration of consumer benefits that OPC had bargained for in previous negotiations with Exelon.

“The merger of Pepco and Exelon was, by the PSC’s own admission, ‘one of the most significant decisions that the Commission will ever make.’ Therefore, it is clear that in rendering a decision of such importance, the Commission should follow its procedures to the letter and require the parties in the case to do the same,” said Mattavous-Frye. “Unfortunately, this did not happen. The resulting decision to approve the merger has produced one of the most complex legal quagmires in the city’s history.”

After the Commission initially rejected the proposed merger terms in August 2015, several parties proposed a settlement that included ratepayer benefits. The Commission stated it would undertake a narrow review of the offer and determine whether it was in the public interest. 

However, the Commission rejected the settlement on February 26, 2016, and instead presented the settling parties with its own set of revised terms, indicating that it would approve these terms if all settling parties agreed to them. While Pepco-Exelon agreed to the terms, OPC and the other settling parties rejected them. Shortly after the settlement was denied, Pepco and Exelon presented the PSC with a settlement offer that was not supported by any of the settling parties or other parties to the case.  Over the objections of the parties, the Commission approved the Pepco‑Exelon unilateral settlement offer, thereby approving the merger. OPC and other parties sought reconsideration of the decision but all were denied. OPC subsequently filed an appeal of the Commission’s decision with the DC Court of Appeals.

“This appeal boils down to two fundamental questions: did the PSC, in the most important case it has ever decided, fail to provide parties with adequate opportunity to be heard and act outside of its authority in approving the merger? OPC submits the answer is yes,” said People’s Counsel Mattavous-Frye.               

The DC Court of Appeals is scheduled to hear the case in May on a date not yet announced.