ACE-Exelon Merger Could Mean Bigger Credits on Customers’ Bills
Details of settlement call for NJ customers to be compensated by same amount as consumers in other states
Atlantic City Electric customers will probably see a credit on their bills in the future, but just how large it will be remains to be determined.
A settlement reached Tuesday between the District of Columbia, Pepco Holdings Inc., and Exelon may remove the last obstacle preventing the $6.8 billion merger of the two companies.
That agreement might increase savings to the half-million customers of Atlantic City Electric, the result of being acquired by Exelon under a prior settlement with state regulators approving the merger this past February.
Under the New Jersey settlement, Atlantic City Electric customers would receivein direct rate credits as part of the merger approval. But the settlement with the New Jersey Board of Public Utilities also includes a so-called most favored jurisdiction provision that requires customers here receive equal benefits to those in other states, including the District of Columbia.
In the D.C. settlement, Exelon will provide $72.8 million for bill credits, low-income assistance, and renewable-energy and energy-efficiency programs, according to the company.
That could mean Atlantic City Electric customers would receive additional credits above and beyond the onetime $114 credit previously negotiated with New Jersey regulators, according to Stefanie Brand, director of the state Division of Rate Counsel.
In the District of Columbia, the credit works out to be $215.94 per customer, Brand said. “ACE customers should get more than they did before,’’ she said. “Certainly, it’s a better settlement than before.’’
The BPU will withhold comment on the issue until its staff has reviewed the (D.C.) agreement to determine the impact in New Jersey, said Greg Reinert, a spokesman for the agency.The settlement in D.C. still must be approved by the District of Columbia Public Service Commission, which unanimously voted against the merger in August.
But Paul Patterson, an energy analyst at Glenrock Associates in New York City, said the latest settlement appears to address key issues that had held up approval previously.
“Without this settlement, it (the merger) appeared to be. Now, it looks to be resurrected,’’ Patterson said.
As part of the agreement, Exelon and Pepco agreed to more than double direct benefits to customers.
“We heard the Public Service Commission’s concerns loud and clear, and this new merger proposal presents greater benefits to the district,’’ said Chris Crane, president and CEO of Exelon.
Despite the tentative agreement, Brand still has concerns about the merger, including provisions calling for the utility to upgrade the reliability of its system. Her office refused to sign off on the New Jersey settlement, expressing worries that there was no limitation on post-merger costs.