Maryland Office of People’s Counsel v. Maryland Public Service Commission

The Maryland Court of Appeals affirmed lower court decisions upholding the Maryland Public Service Commission’s (Commission’s) approval of Exelon Corporation’s acquisition of Pepco Holdings, Inc. and its utility subsidiaries. One of the issues raised on appeal concerned whether the Commission’s assessment of potential harms to renewable energy and distributed generation markets was arbitrary and capricious. The Court of Appeals found that the Commission’s findings supported its conclusion that harm to these markets was speculative. The Court of Appeals also noted that courts may consider “policy goals stated in pertinent statutes or regulations” in determining whether agency action is arbitrary and capricious. In this case, the court said relevant policy goals included combatting the threat of global warming. The court found that the Commission properly considered these issues pursuant to the legislative directive to take the public interest into account in assessing an acquisition.

The Maryland Circuit Court for Queen Anne’s County denied petitions by the Maryland Office of People’s Counsel, Sierra Club, Chesapeake Climate Action Network, and Public Citizen, Inc. for review of the Maryland Public Service Commission’s (PSC’s) approval of a merger between the utility and energy generating businesses, Exelon Corporation and Pepco Holdings, Inc. Among other things, the court found that the PSC had not acted arbitrarily or capriciously when it determined that the petitioners’ allegations that the merger could cause harm to distributed generation and renewable energy markets were speculative and not a basis for disapproval of the merger. At least two of the petitioners appealed the circuit court’s judgment.