UPPER MARLBORO – Although the Prince George’s County Council gave approval to an agreement between Exelon and the executives of Prince George’s and Montgomery counties to allow Exelon’s merger with Pepco, some council members say they think County Executive Rushern Baker III should have been more communicative with them.
The council voted 8-0-1, with Councilwoman Mary Lehman abstaining, to approve the resolution, but will review continue to review it at their next meeting to make further changes.
Councilman Obie Patterson said the council had not been briefed on the deal and did not learn of the agreement until earlier in the week, while Councilwoman Karen Toles questioned how the county administration would monitor the progress of the deal and ensure Exelon and Pepco meet the standards put forth in the agreement.
“This is a major project and a major undertaking and for this council not to be involved in the discussion, I think, is almost irresponsible on the part of those who are asking us to support it,” Patterson said. “You’re involved in a total community…I just think we are not, as legislators, doing what we are charged to do. We are a legislative body. I know this is a county resolution and not a county bill, but I think we could’ve gotten a solution.”
Thomas Himler, deputy chief administrative officer of finance for the county executive’s office, said the county administration could have briefed the council on the negotiations with Exelon and Pepco, but the announcement happened when the administration put together its budget proposal.
“We could’ve provided a briefing. All of this was happening around the time when we were trying to get the budget done, so all of this was happening simultaneously,” Himler said. “This is 20/20 hindsight.”
Toles said there should have been a briefing because it would have given the council a chance to address issues they are concerned about.
“I think we need an overall project manager,” Toles said. “I really think that the county executive’s office should have someone involved with that.”
Lehman said she remains concerned about the deal because of all of the information she must absorb simultaneously.
“I’m abstaining partly because of my frustrations with the process. The fact is that Montgomery County was briefed weeks and weeks ago and I know this because I have a statement from Roger Berliner of the Montgomery County Council (stating their position),” Lehman said. “They said it’s not necessarily a bad deal, but it’s the wrong deal.”
The agreement, which would take effect only if the Maryland Public Service Commission (PSC) approves the $6.8 billion merger, would designate a $36.8 million customer investment fund for bill credits and $57.8 million for energy-efficiency programs, with 20 percent focused on helping low-income customers. It would also require accelerated reliability improvements, a $50 million Green Sustainability Fund for those who want to invest in renewable energies and technology, development of 15 megawatts of solar generation, $4 million to support workforce development.
Baker and Montgomery County Executive Ike Leggett negotiated the deal with Exelon, but Baker did not attend the council’s meeting. Instead, Himler attended in Baker’s place to discuss the details of the deal and how the county would progress after the approval.
Himler said the two sides agreed to the deal on March 16. The Montgomery County Council has already publicly opposed deal because they do not think it holds Exelon accountable enough or put stringent enough conditions on the company to use renewable energy. Himler said the merger will be a benefit to the county because of the reliability the company will provide.
Members of the council still had concerns about the deal because of their lack of involvement in the negotiation process.
Himler said he drew the “short straw” and could be the person overseeing the project for Prince George’s, but Toles said Himler “wears a lot of hats” already and it could prove difficult for him to keep up with so many aspects of the merger.
“With all due respect, Mr. Himler, you have a lot of stuff on your plate,” Toles said. “We need a big brother looking over it.”
Himler said the county administration does not want to “layer the project between too many staff members.” The idea, he said, is to get the merger underway and have the benefits made available to the public as soon as possible.
“If the (Office of Central Services) is still reporting to me then that is who it will fall on if that’s the way we are going to structure it,” Himler said. “But someone on the fifth floor will be monitoring the project—trust me.”
Baker understands the merger’s importance to the county, Himler said, and he fully understands what the agreement allows.
Lehman said the deal has not been embraced by everyone, including Maryland Attorney General Brian Frosh, and she still has concerns about it herself.
Lehman said she is concerned about the lack of competition Exelon will face around the state. Exelon will have 85 percent of the market in the state of Maryland if this is approved and closed, she said.
But according to Wendy Stark, deputy general counsel for Pepco, utility companies do not currently compete against each other.
“The way distribution utilities are set up, each utility serves customers within its own service territory and does not compete against any other utility in the state,” Stark said. “For example, Pepco serves customers in Montgomery and Prince George’s County while BGE serves customers in its service territory. We don’t compete against each other now and it will be the same after this merger.”
The companies will all be a part of Exelon, Lehman said, and it is a major concern when 85 percent of the market will be operated by one company. Stark said Exelon does not set or change rates, so there will be no competition issue.