Nuclear Chaos: The Exelon-PHI Merger and What it Means for Nuclear Power in the United States and the EPA's Carbon Emission Rules

Abstract

As exemplified by the recent proposed mergers of Exelon Corporation (“Exelon”) with Pepco Holdings, Inc. (“PHI”) and NextEra Energy with Hawaiian Electric Industries, nuclear-heavy utility companies are increasingly seeking to offset the losses they are experiencing by acquiring profitable, regulated utilities that do not generate nuclear power. But these mergers have been met with skepticism by the public and in some cases utility regulators. This Note focuses on the utility commissions’ consideration of the Exelon-PHI merger to establish that, despite press coverage that indicated that the District of Columbia (“DC”) Public Service Commission’s (“DC PSC”) initial rejection of the merger might have been influenced by concerns that Exelon’s nuclear losses would be passed on to DC ratepayers, that was not the case. DC PSC’s ultimate acceptance of the proposed merger was also not influenced by Exelon’s nuclear generation activities. This Note also attempts to develop lessons from the Exelon-PHI regulatory process that nuclear-heavy utilities might seek to apply in acquiring non-nuclear, regulated utilities to offset their losses in the unprofitable, deregulated nuclear generation industry and meet the carbon reduction ambitions of the EPA's Clean Power Plan ("CPP"). Lastly, this Note offers policy recommendations that the federal government could pursue to put the nuclear industry on firmer financial ground in order to ensure that the CPP’s carbon emission goals are met.