TESTIMONY DELIVERED BY SEKOU BIDDLE
JANUARY 29, 2015
Good morning, Chairman Orange and members of the Committee my name is Sekou Biddle and I want to thank you for taking the time and creating this forum for the public to weigh in on the proposed merger of Exelon and Pepco. I am especially appreciative of this opportunity knowing that the Council does not have formal role in approving/disapproving a merger, but inviting testimony on this issue before the Council does further the best interests of District consumers in giving a full airing of concerns on this issue.
I, like many residents and consumers, have concerns about the proposed Exelon-Pepco merger. Primarily that the merger does not appear to promise significant benefits to District consumers, but does indeed present the possibility of short, medium and long-term losses for the District. It is truly striking when reviewing the documents about this proposed merger to notice the difference in the perspective of the Office of the People’s counsel and Exelon. Keeping in mind that the Office of the People’s Counsel represents District consumers and Exelon’s responsibility is to enrich its shareholders, I was truly struck by that the fact that when weighing the cost and benefits of this merger against the seven public interest factors the Office of the People’s Counsel found that merger as currently constructed does not meet any of the seven public interest factors.
Recently we have seen a great deal of attention paid to the increasing cost of housing and decreasing affordability for many to live in the District of Columbia. We need to be attentive to issues that potentially increase the cost of living in the District and explore ways to preserve options to hold down costs for seniors and low income residents. The $14 million Customer Investment Fund Exelon is offering consumers seems to be meager compared to the $250 million package given to Maryland when Exelon and Constellation Energy merged 4 years ago.
Many District residents and the District government believe in the need to grow greener and renewal energy sources. Exelon in their own words “believes energy technologies should compete on their own merits, without government subsidies.” This runs counter to what I and many believe the government’s role can be, but clearly serves Exelon’s interest as it seeks to grow its position in the market. Once again in Exelon’s words “There was a time when some government support was needed to help jumpstart certain clean energy technologies, but that’s no longer the case.” Exelon is trying to create a position for itself as the dominate provider and create competitive advantages for itself over other potential competitors, this is not in line with the position I believe the District should take. Given that it is not clear what oversight role would exist after a merger District consumers could find themselves wedded to a utility company that has an ideological belief about expanding and exploring energy technologies that runs counter to what we believe. As we continue to drive significant development projects in the District it will be absolutely vital that our utility partners are aligned with us on the need to support a variety of technologies and innovations in power generations and distribution.
A few additional points that I would like to share. In response to questions about maintaining the community commitment, “Exelon has committed as part of this transaction that giving by the PHI companies will be maintained at levels exceeding their respective 2013 charitable contributions for at least a decade - $50 million commitment.” This promise to minimally increase their community support is vague and leaves the door open to the community commitments decreasing in value over the years. There will be some staffing reductions in corporate or support functions in the near term, and those may only be a prelude to job losses after the two year window on no net involuntary merger-related job losses of Pepco utility employees. Because the approval of this merger relies on their being a benefit to District consumers we need to be careful to account for costs that are likely to be associated with a merger and see to it that benefits outweigh the costs.
Certainly the Public Service Commission has a responsibility to decide on this merger. I hope that they weigh carefully the benefits and liabilities that both Exelon and District consumers face in this proposed merger and determine that this proposed does not provide the benefits District consumers need. Once again I want the thank Chairman Orange and all of the members of this committee for taking time to hold this roundtable and hear from a diverse of constituents who came to discuss this important issue today.
I, like many residents and consumers, have concerns about the proposed Exelon-Pepco merger. Primarily that the merger does not appear to promise significant benefits to District consumers, but does indeed present the possibility of short, medium and long-term losses for the District. It is truly striking when reviewing the documents about this proposed merger to notice the difference in the perspective of the Office of the People’s counsel and Exelon. Keeping in mind that the Office of the People’s Counsel represents District consumers and Exelon’s responsibility is to enrich its shareholders, I was truly struck by that the fact that when weighing the cost and benefits of this merger against the seven public interest factors the Office of the People’s Counsel found that merger as currently constructed does not meet any of the seven public interest factors.
Recently we have seen a great deal of attention paid to the increasing cost of housing and decreasing affordability for many to live in the District of Columbia. We need to be attentive to issues that potentially increase the cost of living in the District and explore ways to preserve options to hold down costs for seniors and low income residents. The $14 million Customer Investment Fund Exelon is offering consumers seems to be meager compared to the $250 million package given to Maryland when Exelon and Constellation Energy merged 4 years ago.
Many District residents and the District government believe in the need to grow greener and renewal energy sources. Exelon in their own words “believes energy technologies should compete on their own merits, without government subsidies.” This runs counter to what I and many believe the government’s role can be, but clearly serves Exelon’s interest as it seeks to grow its position in the market. Once again in Exelon’s words “There was a time when some government support was needed to help jumpstart certain clean energy technologies, but that’s no longer the case.” Exelon is trying to create a position for itself as the dominate provider and create competitive advantages for itself over other potential competitors, this is not in line with the position I believe the District should take. Given that it is not clear what oversight role would exist after a merger District consumers could find themselves wedded to a utility company that has an ideological belief about expanding and exploring energy technologies that runs counter to what we believe. As we continue to drive significant development projects in the District it will be absolutely vital that our utility partners are aligned with us on the need to support a variety of technologies and innovations in power generations and distribution.
A few additional points that I would like to share. In response to questions about maintaining the community commitment, “Exelon has committed as part of this transaction that giving by the PHI companies will be maintained at levels exceeding their respective 2013 charitable contributions for at least a decade - $50 million commitment.” This promise to minimally increase their community support is vague and leaves the door open to the community commitments decreasing in value over the years. There will be some staffing reductions in corporate or support functions in the near term, and those may only be a prelude to job losses after the two year window on no net involuntary merger-related job losses of Pepco utility employees. Because the approval of this merger relies on their being a benefit to District consumers we need to be careful to account for costs that are likely to be associated with a merger and see to it that benefits outweigh the costs.
Certainly the Public Service Commission has a responsibility to decide on this merger. I hope that they weigh carefully the benefits and liabilities that both Exelon and District consumers face in this proposed merger and determine that this proposed does not provide the benefits District consumers need. Once again I want the thank Chairman Orange and all of the members of this committee for taking time to hold this roundtable and hear from a diverse of constituents who came to discuss this important issue today.
