Office of The People's Counsel v. Public Service Comm'n / Exelon Corp.

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             DISTRICT OF COLUMBIA COURT OF APPEALS

                 Nos. 16-AA-815, 16-AA-817, and 16-AA-825

                      OFFICE OF THE PEOPLE’S COUNSEL,
                           DISTRICT OF COLUMBIA,
                    DC SOLAR UNITED NEIGHBORHOODS, and
                            PUBLIC CITIZEN, INC.,
                                PETITIONERS,

                                       V.

          PUBLIC SERVICE COMMISSION OF THE DISTRICT OF COLUMBIA,
                              RESPONDENT,

                                      and

                  EXELON CORPORATION, ET AL., INTERVENORS.

                  On Petitions for Review of a Decision of the
             Public Service Commission of the District of Columbia
                                 (FC-1119-16)

(Argued May 2, 2017                                      Decided July 20, 2017)

      Scott H. Strauss, with whom Sandra Mattavous-Frye, Karen R. Sistrunk,
Laurence C. Daniels, Peter J. Hopkins, Anjali G. Patel, Jason T. Gray, and Eli D.
Eilbott were on the brief, for petitioner Office of the People’s Counsel.

       James C. McKay, Jr., Senior Assistant Attorney General, with whom Karl A.
Racine, Attorney General for the District of Columbia, Todd S. Kim, Solicitor
General, and Loren L. AliKhan, Deputy Solicitor General, were on the brief, for
petitioner District of Columbia.
                                         2

     David J. Arkush, with whom Scott L. Nelson was on the brief, for petitioners
DC Solar United Neighborhoods and Public Citizen, Inc.

      Richard S. Herskovitz, with whom Christopher G. Lipscombe, Craig W.
Berry, and Naza N. Shelley were on the brief, for respondent Public Service
Commission of the District of Columbia.

     David W. DeBruin, with whom Peter E. Meier, Matthew E. Price, and
Zachary C. Schauf were on the brief, for intervenors Exelon Corporation, et al.

      Before FISHER and MCLEESE, Associate Judges, and FARRELL, Senior Judge.

      Opinion for the court by Associate Judge MCLEESE.

      Concurring opinion by Senior Judge FARRELL at page 25.

      MCLEESE, Associate Judge: The Public Service Commission of the District

of Columbia approved a merger application involving intervenor Exelon

Corporation’s purchase of Pepco Holdings, Inc. and its subsidiary, the Potomac

Electric Power Company (Pepco). Petitioners, the Office of the People’s Counsel

(OPC), the District of Columbia Government, and DC Solar United

Neighborhoods jointly with Public Citizen, Inc. (collectively DC SUN), seek

review of the Commission’s decision. Petitioners argue that the Commission made

procedural errors, exceeded its statutory authority, approved merger terms that are

contrary to law or unreasonable, did not clearly explain its reasoning, and failed to

make an independent finding that the merger was in the public interest. We affirm.
                                           3

                                           I.



      In June 2014, Exelon, Pepco, and various related entities asked the

Commission to approve a merger involving Exelon’s purchase of Pepco Holdings,

Inc. pursuant to D.C. Code §§ 34-504 (2012 Repl.) (prohibiting consolidation of

public utilities unless Commission finds consolidation to be in public interest) and

34-1001 (2012 Repl.) (prohibiting purchase of stock of one public utility

corporation by another public utility corporation absent approval by Commission).

The Commission held four community hearings and eleven days of evidentiary

hearings, and received extensive written testimony and comments regarding the

application.   In August 2015, the Commission concluded that the merger as

proposed was not in the public interest.



      In October 2015, applicants moved to reopen the record for the Commission

to consider a Nonunanimous Settlement Agreement (NSA) executed by applicants,

OPC, the District, and several other parties (together, the settling parties). The

Commission agreed to consider the NSA and reopened the record for the limited

purpose of determining whether the NSA was in the public interest.              The

Commission held five days of hearings and received written statements regarding

the NSA. In February 2016, the Commission concluded that the NSA was not in
                                         4

the public interest. Commissioner Fort concurred, but proposed a revised NSA

(RNSA) that she believed would be in the public interest. Although Commissioner

Phillips would have approved the NSA as in the public interest, he indicated that

he would also approve the RNSA if the parties found it acceptable. The settling

parties were instructed to file a notice with the Commission indicating whether

they wished to accept the RNSA or instead to request further relief.



      Applicants filed a request for other relief, asking that the Commission

approve the merger in accordance with: (1) the terms outlined in the NSA; (2) the

terms of the RNSA; or (3) the terms of a third “middle ground” proposal.

Petitioners opposed applicants’ request. In March 2016, the Commission approved

the merger under the terms of the RNSA with one additional revision.         The

Commission denied petitioners’ applications for reconsideration.



                                        II.



      Our review of the Commission’s orders is limited. D.C. Code § 34-606

(2012 Repl.). We will sustain the Commission’s legal conclusions if they are

“reasonable and based upon factors within the Commission’s expertise.” District

of Columbia v. District of Columbia Pub. Serv. Comm’n, 905 A.2d 249, 256 n.22
                                          5

(D.C. 2006) (internal quotation marks omitted). We accord great deference to the

Commission’s interpretation of the Public Utilities Act, Office of People’s Counsel

v. Pub. Serv. Comm’n, 477 A.2d 1093, 1098 (D.C. 1984), and we defer to the

Commission’s interpretation of its own regulations unless that interpretation is

plainly erroneous, Office of People’s Counsel v. Pub. Serv. Comm’n, 955 A.2d

169, 173 (D.C. 2008). The Commission’s findings of fact are conclusive “unless it

shall appear that such findings . . . are unreasonable, arbitrary, or capricious.” D.C.

Code § 34-606.       “To permit meaningful judicial review, we require the

[Commission] to explain its actions fully and clearly. If the [Commission] has

done so, a petitioner challenging its decision . . . then must carry the heavy burden

of demonstrating clearly and convincingly a fatal flaw in the action taken.”

District of Columbia v. District of Columbia Pub. Serv. Comm’n, 905 A.2d at 256

n.22 (citation and internal quotation marks omitted). In sum, our review of the

substance of the Commission’s decisions is “the narrowest judicial review in the

field of administrative law.” Wash. Gas Energy Servs. v. District of Columbia

Pub. Serv. Comm’n, 924 A.2d 296, 303 (D.C. 2007) (internal quotation marks

omitted).
                                        6

                                       III.



                           A. Notice of NSA Hearings



      On October 28, 2015, the Commission gave notice that it would hold a

public-interest hearing on the merits of the NSA beginning on December 2, which

was thirty-five days after issuance of that notice. The Commission further advised

that it would hold a community hearing at a date and time to be announced. On

November 5, the Commission issued an order giving twelve days’ notice of the

community hearing.



      DC SUN argues that the Commission’s notice of these hearings was

inadequate. The parties dispute whether that objection, and several of petitioners’

other objections, were properly raised before the Commission. Whether issues are

properly raised before the Commission is generally not a jurisdictional issue.

Wash. Gas Light Co. v. Pub. Serv. Comm’n, 982 A.2d 691, 699-708 (D.C. 2009).

Because the Commission addressed the notice issue on the merits, and because we

uphold the Commission’s decision, we see no need to address the question whether

the notice issue was properly raised before the Commission. For similar reasons,
                                         7

we also decline to address whether a number of petitioners’ other objections were

adequately preserved.



      In challenging the adequacy of the public notice of the hearings on the NSA,

DC SUN first relies on D.C. Code § 34-909 (a) (2012 Repl.), which provides that:

            Notice of every rate application or change in condition of
            service proposed and filed with the Public Service
            Commission shall be given by the utility to each
            residential or commercial rate payer affected by the
            proposed rate application or change. . . . For every
            proceeding in which the Commission has a public
            hearing, the public shall be given a timely opportunity to
            present its views, as evidence of record, with at least 45
            days[’] notice, with notice widely and publicly
            distributed in a form sufficiently detailed and complete to
            permit the public to realize its specific and affected
            interest.

The Commission concluded that (1) this provision requires forty-five-day notice

only in rate cases and cases involving changes in conditions of service, and (2) the

present case is neither a rate case nor a case involving changes in conditions of

service. DC SUN does not dispute the latter point, and we therefore have no

occasion to address the point. Instead, DC SUN argues that § 34-909 (a) requires

forty-five-day notice of all public hearings held by the Commission.
                                          8

      Considered in isolation, the last sentence of § 34-909 (a) supports DC SUN’s

position, because that sentence refers broadly to “every proceeding in which the

Commission has a public hearing.” It is well settled, however, that

             a word in a statute may or may not extend to the outer
             limits of its definitional possibilities. The meaning—or
             ambiguity—of certain words or phrases may only
             become evident when placed in context. Therefore, we
             do not read statutory words in isolation; the language of
             surrounding and related paragraphs may be instrumental
             to understanding them. We consider not only the bare
             meaning of the word but also its placement and purpose
             in the statutory scheme. Statutory interpretation is a
             holistic endeavor.

Tippett v. Daly, 10 A.3d 1123, 1127 (D.C. 2010) (en banc) (brackets, citations,

ellipsis, and internal quotation marks omitted).



      In concluding that the forty-five-day notice requirement is applicable only to

rate cases and cases involving changes in conditions of service, the Commission

pointed out that the rest of § 34-909 (a) addresses rate cases and cases in which

there is a change in conditions of service. The Commission also noted that it had

never before applied the notice requirement in a non-rate case.          Finally, the

Commission explained that this court held in Office of People’s Counsel v. Pub.
                                         9

Serv. Comm’n, 889 A.2d 1003, 1008 (D.C. 2006), that the notice-and-comment

requirements of § 34-909 (a) did not apply to a non-rate case.1



      We hold that the Commission reasonably interpreted the seemingly broad

language in the last sentence of § 34-909 (a) as limited to rate cases and cases

involving changes in conditions of service. Cf., e.g., Gutierrez v. Ada, 528 U.S.

250, 254-58 (2000) (holding that phrase “any election” in 48 U.S.C. § 1422 should

be construed narrowly to mean election for Governor and Lieutenant Governor;

statute repeatedly referred to such elections, and “[a] word is known by the

company it keeps[.] The maxim noscitur a sociis, . . . while not an inescapable

rule, is often wisely applied where a word is capable of many meanings in order to

avoid the giving of unintended breadth to the Acts of Congress.”) (citation and



      1
          The Commission also noted that § 34-909’s title refers to rate cases and
cases involving changes in conditions of service. That title, however, appears to
have been added by codifiers rather than the Council of the District of Columbia.
Act of Mar. 4, 1913, ch. 150, § 8, para. 39, 37 Stat. 983; 31 D.C. Reg. 6444 (1985);
32 D.C. Reg. 2961 (1985). We therefore do not place weight on the title. See, e.g.,
United States v. Castro, 837 F.2d 441, 442 n.1 (11th Cir. 1988) (title that “was
added subsequent to enactment by those responsible for codification of the
legislation . . . cannot therefore properly be of aid in determining the intent of
Congress . . . . Where headings of chapters, articles, or sections are mere arbitrary
designations inserted for convenience of reference by clerks or other persons who
have no legislative authority, such head[ing]s are held not to be proper matters for
consideration in the interpretation of the statute.”) (citations, parentheses, and
internal quotation marks omitted).
                                        10

internal quotation marks omitted).     We therefore defer to the Commission’s

conclusion that DC SUN was not entitled to forty-five days’ notice of the hearings

on the NSA.



      DC SUN argues in the alternative that the notice provided by the

Commission violated the District of Columbia Administrative Procedure Act (DC

APA), which mandates “reasonable notice of the afforded hearing” in contested

cases. D.C. Code § 2-509 (a) (2016 Repl.). Because no one has disputed the point,

we assume without deciding that § 2-509 (a) applies to the present proceeding. Cf.

Commc’n Workers of Am., Local 2336 v. District of Columbia Taxicab Comm’n,

542 A.2d 1221, 1222-25 (D.C. 1988) (ratemaking proceeding before Taxicab

Commission was not “contested case” within meaning of DC APA).



      We conclude that the Commission provided reasonable public notice of the

hearings relating to the NSA. First, the Commission gave thirty-five days’ notice

for the public-interest hearing and twelve days’ notice for the community hearing.

Second, there was substantial public participation at the hearings on the NSA:

over 250 residents, community groups, non-profits, and businesses registered to

submit oral comments.      At least twelve witnesses presented live testimony,

multiple parties submitted written testimony, and fourteen interested parties filed
                                        11

twelve post-hearing initial briefs and nine reply briefs. Third, DC SUN gave a

lengthy opening statement on the first day of the public-interest hearings on the

NSA, appeared on the record at those hearings, and had the opportunity to cross-

examine witnesses. Fourth, the Commission held the record open for thirty-four

days after the hearings ended to allow for the submission of additional comments.

During that time, DC SUN filed over ninety pages of briefing in opposition to the

NSA. Fifth, at the time the Commission provided public notice, the Commission

had already held extensive public hearings on the original merger application, with

ample public notice.    Sixth, over the course of the merger proceedings, the

Commission held evidentiary hearings spanning fourteen days, convened six

community hearings, and received written testimony and comments from over

3,000 interested persons. Finally, DC SUN has not identified any concrete point

that could have been raised but was not because of inadequate notice of the

hearings. Under the circumstances, we have no difficulty concluding that the

Commission provided adequate public notice. Cf. Comm. for Wash.’s Riverfront

Parks v. Thompson, 451 A.2d 1177, 1182, 1184 (D.C. 1982) (finding ten days’

public notice of hearing reasonable).
                                          12

                              B. Rejection of the NSA



      The District argues that the NSA considered as a whole was in the public

interest and that the Commission lacked authority to require changes to the NSA to

further advance the public interest. We conclude that the Commission’s authority

was not so limited.



      Before approving the proposed merger, the Commission was required not

only to determine that “said consolidation will be in the public interest,” but also to

“approve[] in writing the terms upon which said consolidation shall be made.”

D.C. Code § 34-504. More generally, “[i]n supervising and regulating utility or

energy companies, the Commission shall consider the public safety, the economy

of the District, the conservation of natural resources, and the preservation of

environmental quality.” D.C. Code § 34-808.02 (2017 Supp.); cf. D.C. Code § 34-

301 (1)-(2) (2012 Repl.) (Commission has “general supervision” of electrical

companies, including authority to issue orders with respect to transmission and

distribution of electricity “as will reasonably promote the public interest[ and]

preserve the public health”). These provisions contradict the District’s suggestion

that the Commission’s function is limited to giving an overall “thumbs up” or

“thumbs down” to a merger as proposed. Rather, they provide the Commission
                                          13

with the authority to focus on particular terms of a proposed merger and to require

specific changes to those terms to further advance the public interest. The District

has cited no contrary authority and we are aware of none.



      Relatedly, DC SUN argues that the Commission erred in “shoring up” the

NSA by suggesting additional terms to the parties.          We do not agree.       The

Commission’s regulations explicitly allow the Commission to propose alternative

terms after rejecting a settlement. 15 DCMR § 130.17 (b) (2017) (“If a settlement

is rejected, the Commission may take various steps, including the following:

. . . (b) [p]ropose alternative terms to the parties and allow the parties a reasonable

time within which to elect to accept such terms or request other relief.”). The

Commission adequately explained its decision to take that approach in response to

the NSA even though the Commission had not proposed alternative terms when

presented with the original merger application.       Specifically, the Commission

explained that the “base of benefits [was] substantially higher” in the NSA than in

the original application; that in crafting the NSA the settling parties had

“endeavored to address all of the deficiencies in the original [a]pplication”; and

that as a result “the changes needed to cure the remaining deficiencies were

few[ and] clearly suggested by the evidentiary record.”
                                         14

                      C. Applicants’ Request for Other Relief



      DC SUN and OPC argue that the Commission’s procedures following the

rejection of the NSA were unfair, contrary to law, and inadequately explained. We

conclude otherwise.



      After rejecting the initial application, the Commission reopened the record

“for the very limited purpose of considering whether the [NSA] . . . is in the public

interest,” stating that the record would be reopened “for no other purpose.” After

rejecting the NSA, the Commission directed the settling parties to either accept the

RNSA or request other relief pursuant to 15 DCMR § 130.17 (b). Applicants filed

a unilateral request for other relief, asking the Commission to approve the merger

in one of three forms based on the existing record. A subsequent email sent by

Commission staff stated that applicants’ request would be treated “like any other

motion filed in a Commission proceeding.” Petitioners all filed responses to the

request, objecting on procedural and substantive grounds. None of the petitioners

requested additional process in the event that the Commission chose to decide

applicants’ request on the merits.
                                          15

      DC SUN and OPC contend that they did not have an adequate opportunity to

address concerns raised by the RNSA, because the Commission did not give them

notice that it might grant applicants’ request for other relief without further

discovery or hearings. We see no unfairness in the Commission’s decision to grant

applicants’ request for other relief without sua sponte directing further discovery

and hearings.    The Commission had already held extensive proceedings with

respect to the initial application and the NSA; the RNSA differed from the NSA in

only a few discrete respects; applicants’ request for other relief explicitly asked for

a ruling based on the existing record; and none of the petitioners asked for further

process when opposing the request for other relief. Under the circumstances, we

conclude that if petitioners believed that further discovery or hearings were

necessary, they were obliged to bring that point to the Commission’s attention

before the Commission ruled on applicants’ request. See, e.g., NLRB v. Mar Salle,

Inc., 138 U.S. App. D.C. 135, 140 n.8, 425 F.2d 566, 571 n.8 (1970) (where party

objected but failed to request hearing, Board did not err by failing to require

hearing sua sponte); cf. Wash. Gas Light Co. v. District of Columbia Pub. Serv.

Comm’n, 856 A.2d 1098, 1106-07 (D.C. 2004) (holding that Commission did not

act arbitrarily in denying party’s untimely request for evidentiary hearing).
                                        16

      DC SUN and OPC raise a number of other procedural objections to the

Commission’s acceptance of applicants’ request for other relief. OPC argues that

the request was a unilateral settlement agreement approved by the Commission in

violation of D.C. Code § 2-509 (a) (providing that “any contested case may be

disposed of by . . . agreed settlement”) (emphasis added). OPC further argues that

the Commission’s action was prohibited by 15 DCMR § 130.17 (b), which OPC

argues allows only for requests for relief submitted by all settling parties. DC SUN

contends that the Commission’s actions constituted either: (1) a partial acceptance

and partial rejection of a non-severable settlement agreement in violation of 15

DCMR § 130.16, and a grant of an application for reconsideration that did not

meet the requirements of 15 DCMR § 140 (2017); or (2) an approval of a new

merger application that did not comport with proper procedures. We agree with

the Commission that these procedural objections are not well-founded.



      As the Commission reasonably explained, the Commission followed

applicable procedural requirements in rejecting the NSA; treating applicants’

request for other relief as a motion seeking approval of the merger on the merits;

and deciding that motion on the merits after determining that doing so would be in

the public interest. See 15 DCMR § 105.8 (2017) (written motions may be filed at

any time); 15 DCMR § 130.17 (c) (if settlement is rejected, Commission may
                                          17

“[p]roceed with litigation of the case”); cf. 15 DCMR § 146.1 (1981) (allowing

Commission to waive regulations).



                                D. Escrow Account



       In approving the merger, the Commission required Exelon to place over $32

million into an escrow account, to be disbursed at the Commission’s direction, to

fund   projects   supporting    energy    efficiency,    energy   conservation,    and

modernization of the energy-delivery system.            The District argues that this

requirement violates the Clean and Affordable Energy Act of 2008 (CAEA), 55

D.C. Reg. 9225 (2008) (codified in scattered sections of D.C. Code Titles 6, 8, and

34), which the District construes as having “terminated the Commission’s authority

over such programs.” The District also argues that the escrow fund violates the

requirement that “[a]ll money received by any agency . . . of the District in its . . .

official capacity shall belong to the District government and shall be paid promptly

to the Mayor” for deposit into the District’s General Fund or into special funds

established by the Council. D.C. Code § 1-204.50 (2016 Repl.). We do not

address these arguments, because the District failed to present them at any point

during the proceedings before the Commission. See, e.g., Stackhouse v. District of

Columbia Dep’t of Emp’t Servs., 111 A.3d 636, 639 (D.C. 2015) (“[I]n the absence
                                          18

of exceptional circumstances, we will not entertain a claim that was not raised

before the agency.”) (internal quotation marks omitted).



      We see no exceptional circumstances here. Although we express no view on

their ultimate merit, the District’s belated objections are neither clearly correct nor

of the fundamental character that might justify disregarding the District’s failure to

raise those objections before the Commission. See, e.g., Wash. Gas Light Co., 982

A.2d at 700, 710 (court may consider argument not raised before agency where

argument raises “an alleged defect in an agency’s jurisdiction . . . so serious that it

wholly deprives the agency of the power to act” or “concerns the very constitution

of the agency”) (brackets, ellipsis, and internal quotation marks omitted); District

of Columbia Hous. Auth. v. District of Columbia Office of Human Rights, 881 A.2d

600, 612-13 (D.C. 2005) (“[T]his exception to waiver applies only where the

challenge is to the agency’s inherent capacity to act, or where the challenged action

is plausibly claimed to be patently in excess of the agency’s authority . . . .

Otherwise, the general rule is that even jurisdictional questions must be put to

agencies before they are brought to the reviewing court.”) (brackets, citations, and

internal quotation marks omitted).
                                        19

                     E. General Adequacy of Explanation



      The District and DC SUN argue that the Commission failed to fully and

clearly explain its decision to approve the merger as revised. We conclude to the

contrary.



      The proceedings before the Commission were extensive, and the

Commission issued several orders, totaling over 330 pages, discussing at length the

various proposals before it. The Commission articulated the applicable public-

interest standard several times and repeatedly applied that standard to the various

terms under consideration. The Commission also repeatedly stated that the burden

of persuasion was on the proponents of the merger. The Commission’s final order

approving the merger incorporated the Commission’s earlier orders and included a

lengthy recitation of the Commission’s findings of fact and conclusions of law.



      The District and DC SUN object that the Commission scattered its reasoning

across multiple orders instead of providing a single order fully explaining the

Commission’s analysis.      They also contend that various statements in the

Commission’s orders demonstrate that the Commission (1) failed to independently

determine whether the application as revised was in the public interest; and (2)
                                              20

applied an incorrect burden of proof.              We acknowledge that it is somewhat

laborious to piece together the Commission’s reasoning from the various orders.

We also acknowledge that a few sentences in the Commission’s orders, considered

in isolation, could arguably be read to support petitioners’ concerns. We are

confident, however, that the Commission’s orders taken as a whole demonstrate

that the Commission applied the correct standard and adequately explained its

decision. Cf. D.C. Tel. Answering Serv. Comm. v. Pub. Serv. Comm’n, 476 A.2d

1113, 1125 (D.C. 1984) (“[The Commission] was entitled to rely, as it apparently

did here, on explanations contained in earlier orders.”); P.R. Mar. Shipping Auth. v.

Fed. Mar. Comm’n, 220 U.S. App. D.C. 13, 39, 678 F.2d 327, 353 (1982)

(rejecting argument that agency misallocated burden of proof; “There is every

indication throughout the Order that the [Commission] properly allocated the

burden to the carriers.      We are unswayed by arguments based on isolated

sentences, viewed out of context . . . .”).



                            F. Other Specific Provisions



      In addition to generally challenging the adequacy of the Commission’s

explanations, petitioners point to several specific provisions that they contend were
                                         21

arbitrarily revised and approved without sufficient explanation. We conclude that

the challenged decisions were reasonable and adequately explained.



      First, petitioners challenge the Commission’s revision of a term in the NSA

providing for a $25.6 million offset to protect residential consumers from any rate

increase, as well as a guarantee that no residential rate increase would occur before

March 31, 2019. The merger as approved includes an offset in the same amount

(and additional incremental offsets of up to $1 million per year) that could be used

to offset subsequent rate increases for both residential and non-residential

consumers, but does not include a guarantee that no residential rate increase would

occur before March 31, 2019. The revision also leaves it to the Commission to

determine in future ratemaking proceedings how the offset will be made and how

to allocate the offset as between residential and non-residential consumers. In

making these changes, the Commission reasonably explained that providing the

offset exclusively to residential consumers would be unfair and unjustified. We

see nothing unreasonable in the Commission’s ultimate decision to leave for a later

ratemaking proceeding decisions about how to allocate the offset as between

residential and non-residential consumers and whether to permit a rate increase for

residential consumers before March 31, 2019. See, e.g., GTE Serv. Corp. v. Fed.

Commc’ns Comm’n, 251 U.S. App. D.C. 181, 183, 191-92, 782 F.2d 263, 265,
                                        22

273-74 (1986) (rejecting argument that FCC acted impermissibly by approving

transfer of licenses and facilities but deferring questions about accounting of

expenses to subsequent ratemaking proceedings; “Absent some unreasonable delay

or significant prejudice to the parties, the Commission cannot be said to abuse its

discretion merely by adopting procedures and timetables which it considers

necessary to effective treatment of complex and difficult problems.”).



      Second, and relatedly, DC SUN points out that the Commission rejected the

initial application in part out of concern about how applicants determined that

$33.75 million was the appropriate amount for a Consumer Investment Fund (CIF)

designed to provide direct benefits to consumers. Although that amount was

increased to $72.8 million in the merger as approved, DC SUN accurately notes

that the Commission never explained why it was satisfied as to the basis for that

larger figure. As originally proposed, the CIF was based on anticipated savings to

applicants arising from the merger (referred to as “synergy savings”), which the

Commission acknowledged were not guaranteed. In approving the merger, the

Commission relied upon applicants’ commitment to track merger-related savings

in subsequent ratemaking cases. The application as revised also provides that (1)

Pepco may recover costs incurred in achieving synergy savings only to the extent

those costs do not exceed the amount of synergy savings in an applicable year and
                                         23

(2) all synergy savings allocable to the District will flow back to consumers. Thus,

after initially expressing concerns about the underlying basis for the $33.75 million

benefit to consumers, the Commission ultimately accepted a proposal that more

than doubles that benefit and establishes protections to secure for District

consumers the “synergy savings” from the merger that are properly allocable to the

District.   Here too we conclude that the Commission acted reasonably and

adequately explained its decision.



       Third, the District challenges the Commission’s revision of a provision in

the NSA requiring Exelon to develop ten megawatts of solar generation, five

megawatts of which was to be constructed at DC Water Blue Plains. As approved,

the merger instead requires Exelon to develop seven megawatts of solar generation

outside of Blue Plains and requires Pepco to support the development of five

megawatts of solar generation at Blue Plains by a vendor selected by DC Water.

In making this change, the Commission reasonably explained that the original

proposal gave Exelon the exclusive right to develop solar generation at Blue

Plains, thereby compromising the Commission’s statutory responsibility to protect

retail markets from anticompetitive conduct and conditions. D.C. Code § 34-

1512 (a) (2012 Repl.).
                                         24

      Finally, the District challenges the Commission’s revision of provisions in

the NSA requiring Exelon to contribute to special funds controlled by the District

that support the expansion of renewable generation, energy efficiency, and

sustainability.   As previously noted, the merger as approved instead requires

Exelon to place such funds into an escrow account to support energy efficiency

programs, energy conservation, and modernization of the electrical grid, as the

Commission directs.     In making that change, the Commission explained that

monies kept in special District-controlled funds could be “reprogrammed” by the

District government and thus ultimately might not be devoted to the intended

purposes. We have already addressed the District’s claim that it was contrary to

law to require Exelon to place the funds in an escrow account. Supra at 17-18.

The District also argues, however, that the Commission unreasonably ignored the

District’s representations that it would oppose such reprogramming. The District

has not disputed that it could not provide a binding assurance that the funds at issue

would not be reprogrammed, as had happened in the past to similar funds. The

Commission thus had reasonable policy grounds for instead requiring Exelon to

place the funds at issue in an escrow account.
                                        25

      For the foregoing reasons, the Commission’s order is



                                                             Affirmed.



      FARRELL, Senior Judge, concurring: I join Judge McLeese’s admirably

concise opinion for the court, and write just to make two brief points. The first is

the obvious one that if the D.C. Council, like the Executive, thinks the Commission

overreached itself, see D.C. Code § 1-204.50 (2016 Repl.), by making Pepco set up

an escrow fund under the supervision (and power to disburse monies) of the

Commission, the Council has its own remedies. Second, I tip my hat -- and have

little doubt my colleagues do also -- to the gruelingly conscientious work of the

Commission in treating and resolving the issues in this case, one it recognized as

importantly affecting the welfare of the District’s residents going forward. The

succession of detailed administrative orders and findings, especially those bearing

the signature of Commissioner Fort, are of a clarity and quality any appellate judge

could be proud of.