At FERC, OPC Raises RTO Stakeholder Voting Concerns Arising From Exelon-Pepco Merger

In comments to FERC, the Office of the People's Counsel for the District of Columbia has raised concerns, "about the influence that a company of the size of the proposed post-merger," Exelon-Pepco Holdings company, "would be able to exert on the PJM Interconnection, LLC ('PJM') stakeholder process."

"By combining so many regulated utilities and unregulated affiliates under one corporate umbrella, the PJM stakeholder process will likely disproportionately reflect the views of one corporation. Furthermore, the Office is concerned that a natural tendency following the merger will be for the Exelon subsidiaries to vote in a way that benefits the overall corporation as opposed to the interests of the individual operating subsidiaries and their customers – interests which may vary from one subsidiary to another based on the unique attributes and economic factors of the jurisdictions which they serve," OPC said.

"Prior to the filing of the Application, PHI had been a consistent participant in the PJM stakeholder process and had frequently been a vocal advocate for full consideration of how decisions made in that process impact its customers. The potential for the elimination of PHI's independent voice in the PJM stakeholder process should give this Commission serious pause, in its review of the Application, as it could have a deleterious impact on the Commission's regulation of wholesale markets," OPC said.

"The PJM stakeholder process has substantial influence over the internal structure and governance of PJM, as well as the terms and conditions of the rate schedules submitted by PJM for Commission approval," OPC noted. "Moreover, it is not uncommon for supporters of a proposed FERC filing to request that the Commission give considerable weight to the fact that a proposal was developed through the PJM stakeholder process, or for the Commission to accord such weight to a proposal that has garnered substantial support in the PJM stakeholder process."

"If approved, the proposed merger could lead to the suppression of individual subsidiary input in the PJM stakeholder process which could potentially influence FERC rulings. Therefore, it will be critical for FERC to conduct a full analysis of how the proposed merger could adversely impact the interests of PHI customers in the wholesale electricity markets," OPC said.