Exelon has a long history of using political influence to oppose the deployment of renewable energy. Exelon’s political operations may impact the company’s ability to show that a merger with Pepco would provide a tangible benefit to customers on the criteria of conserving natural resources and preserving environmental quality - two factors that must be considered in the District of Columbia. According to the Office of the People’s Counsel, “the [Exelon-Pepco] merger is not in the public interest…as a result of Exelon’s longstanding resistance to policies promoting renewable energy.”
If approved, the Exelon-Pepco merger would empower the company to continue its anti-renewable campaign in Washington, D.C., and Maryland, negatively impact ratepayers, and hinder the growth of the renewable energy industry.
Lobbying Against the Renewable Portfolio Standard in Illinois
Exelon has routinely worked against renewable energy policies and used its financial resources and political influence to benefit the company at the expense of environmental quality and renewables. Most recently, Exelon has proposed a bill in Illinois, the Low Carbon Portfolio Standard (LCPS), that would subsidize nuclear plants that are struggling to compete with the cheap cost of electricity from natural gas plants and wind turbines. As written, the LCPS would increase rates for ratepayers, and Exelon’s nuclear plants would earn an estimated $300 million per year from low carbon credits while renewables would get almost nothing. Crain’s Chicago Business Journal documented that “Exelon long has complained that profits at its six nuclear power plants in Illinois are under pressure in part due to competition from tax-subsidized wind farms. Exelon is backing state legislation that would create a new surcharge on most electric bills throughout the state that would funnel as much as $300 million a year to the company's Illinois nukes.”
In the past, Exelon opposed fixing the Illinois’ renewable energy law (RPS) despite the fact that the fix could save ratepayers up to $280 million between 2014 and 2017. Flaws in the RPS have plagued the law and resulted in millions of dollars, intended to incentivize clean energy projects, remaining stuck at the Illinois Power Agency. Yet, an Exelon spokesperson claimed, “The law is working as intended…”
Anti-Solar Actions and Funding of Edison Electric Institute
Exelon has also made clear that the company’s position is to actively work to limit distributed solar energy resources through demand charges and other political mechanisms. In a recent news release, Exelon said, “To ensure the equitable sharing of grid costs, utilities would recover residential delivery costs through a combination of charges, including a demand charge…” In other words, Exelon is hoping to charge customers who install distributed rooftop solar.
Independent studies show that distributed rooftop solar benefits all ratepayers, and is not subsidized by non-solar customers as Exelon and other utilities claim. Recent reports commissioned by regulators in Mississippi, Nevada, and Maine, and the state consumer advocate in Vermont show that distributed solar produces benefits for all ratepayers.
Despite these facts, Exelon appears to be echoing talking points that have been used by the Edison Electric Institute (EEI), the utility trade association. EEI was recently exposed in the Washington Post for launching a plan to attack rooftop solar because the competition threatens the traditional utility business model. Exelon sent $3.4 million to EEI in 2012 and in the latest disclosure for January through June 2013, Exelon spent $3.8 million in payments to EEI.
Connections to Fossil Fuel Front Groups, Koch Industries
Furthermore, Exelon joined forces with fossil fuel connected groups to attack clean energy and protect its financial interests, despite the negative impacts their actions could have on ratepayers and the renewable energy industry.
Exelon teamed up with the American Energy Alliance (AEA), which is affiliated with the Institute for Energy Research (a group that receives funding from fossil fuel interests and is led by Thomas Pyle, a former Koch Industries lobbyist), to attack the wind production tax credit. Exelon sent $290,000 in 2012 and $236,000 in the first half of 2013 to AEA, according to the latest disclosures of Exelon’s political spending. AEA and Exelon communicated “in weekly emails about how best to fight another extension of the [wind production] tax credit.”
In addition, Exelon hired The Nickles Group (run by former Senator Don Nickles) to lobby against the wind Production Tax Credit (PTC). Koch Companies Public Sector (a subsidiary of Koch Industries) also hired The Nickles Group in June 2014. Days after the Koch Industries hired The Nickles Group, Former Senator Nickels placed a Letter to the Editor in the New York Times calling for the end of “federal subsidies for renewables like the wind production tax credit.” Koch Industries directly competes with renewable energy like wind due to its investments in coal and natural gas industries and has backed front groups and lobbyists attacking pro-renewable energy policies.
Finally, Exelon’s subsidiary in Illinois, Commonwealth Edison, funded the American Legislative Exchange Council (ALEC) and was a sponsor at ALEC’s 40th Annual Meeting in Chicago in 2013. ALEC’s Energy, Environment, and Agriculture Task Force, whose members include fossil fuel and utility interests, has produced model legislation attacking state level clean energy laws and solar net metering policies and distributed those model bills to legislators across the country.
Anti-Renewable Lobbying Not in the Public Interest
Exelon’s history of anti-renewable energy campaigning makes it difficult to argue that the Exelon-Pepco merger would conserve natural resources and preserve environmental quality. The District of Columbia’s renewable portfolio standard and other pro-clean energy policies could conflict with Exelon’s financial interests. As the records show, Exelon does not hesitate to fund front groups and aggressive political lobbying to advocate for its interests and eliminate pro-clean energy policies when those policies conflict with Exelon’s bottom line. With the cost of clean energy plummeting, we should be encouraging pro-renewable energy policies, not subsidizing expensive nuclear power to benefit Exelon at the expense of ratepayers.