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Statement: Planned Exelon breakup good news for ratepayers, but Marylanders still at risk

for Immediate Release

BALTIMORE -- Exelon Corporation announced plans this morning to separate its regulated utility business from its generation and customer-facing power supply business, creating two publicly traded companies. BGE, Delmarva Power, and Pepco, the electric utilities serving most of Maryland, along with two other regulated electric and gas utilities, remain a subsidiary of Exelon Utilities. And the company will continue to manage energy generation, the majority of which comprises the nation’s largest fleet of nuclear power plants, through its subsidiary Exelon Generation.

While Maryland restructured the electricity industry two decades ago, endeavoring to break up the vertically integrated utility model, Exelon, through its various subsidiaries, continues to own all of the “upstream” to “downstream” assets from generation to delivery. The end result is as if restructuring had not happened. As Maryland PIRG and others have pointed out, this corporate structure presents numerous potentially harmful conflicts of interest. Maryland PIRG opposed the restructuring of the electricity industry and Exelon’s 2015 merger with Pepco

And, as Exelon’s aging and expensive nuclear fleet approaches retirement, the company has made multiple efforts to protect profits and reduce their financial risk, often seeking government subsidies.

In response to the announcement, Maryland PIRG Director Emily Scarr made the following statement:

Exelon’s ownership of energy generation and distribution through BGE, Pepco, and Delmarva Power has created long-standing conflicts of interests and Maryland consumers have suffered as a result. Separating Exelon’s generation assets from its regulated utilities is good news for their utility customers in Maryland and the public, but the devil will be in the details, and risks still remain.

Exelon's generation assets are dominated by a fleet of aging, dangerous, and expensive nuclear power plants including two Maryland reactors at Calvert Cliffs. As Exelon makes less money from their nuclear plants, and even starts losing money, they may seek state subsidies as they have throughout the country. And they may make budget cuts to their operations, which could compromise safety. 

Gov. Hogan and state legislators will need to be increasingly vigilant on both fronts. The federal government has fallen short on nuclear safety and Maryland should not be subsidizing this expensive, dangerous and outdated technology. 

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