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At a recent event, Senator Elizabeth Warren described postal banking as a triple win for the government, public and postal service. For the public it could be an essential new route to provide basic banking services to rural areas and inner cities.

One in four households are estimated to be underbanked – with high proportions of those under the age of 25 and in black or Hispanic communities. Basic banking services like ATM access, check-cashing, and small-scale lending could save these underbanked households $2,412 each year.

The underbanked are also most vulnerable to the practices of predatory financial service providers – nearly half of Americans would have to borrow money should they have a financial emergency that cost over $400. That’s the equivalent of an emergency room visit or a car accident. This has led to fringe lenders in the U.S. outnumbering McDonalds and Starbucks.

The poorest American families have been faced with exacerbated charges on their earned income while the majority of bank closures happen in the areas they live, the areas that are the most in need.

Even community banks and (in some cases) credit unions, which once existed to serve the underbanked, can be bogged down with account fees and the cost of staying open that make it impossible for lower income clients to continue banking there.

Postal banking is a rational solution to the many problems faced by the chronically underbanked, according to the book How the Other Half Banks, by Mehrsa Baradaran, who also spoke at the event.

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Yesterday, Washington, D.C., community leaders called for a formal investigation into questions surrounding Mayor Muriel Bowser’s decision to flip-flop on her opposition to the proposed takeover of Pepco by Chicago-based Exelon.

On August 25, with the mayor’s backing, the D.C. Public Service Commission unanimously voted to reject the proposed takeover.

On October 6, the mayor announced an 11th-hour deal with Exelon to advance its acquisition bid.

At the heart of our call for an investigation is the question:

Why did the mayor change her mind?

Just days before she announced the backroom deal with Exelon, Mayor Bowser struck a $25 million sponsorship deal with Pepco to pave the way for the future DC United soccer stadium. The $25 million was used by the D.C. government to acquire through eminent domain part of the land that will be home to the new stadium. In return, Pepco may get to brand a street or small park in Southwest D.C. – a big check for seemingly so little in return.

But the appearance of pay-to-play politics and quid pro quo in advancing Exelon’s takeover of Pepco do not end there.

Public Citizen and its allies have started to connect the dots of the Bowser-Exelon-Pepco web of influence –

covertwitterpepcoexelonand have formally called on the District Board of Ethics and Government Accountability to “evaluate these two high-stakes situations to ensure that there was no impropriety, collusion, or unethical conduct of any kind.” Public Citizen and the Chesapeake Climate Action Network have also filed a Freedom of Information Act request for all internal correspondence between the mayor’s office, Pepco and Exelon regarding the controversial negotiations.

Not only does the mayor’s deal with Exelon still fail the public interest test, but it is also tainted by the appearance of corruption.

Meanwhile, Exelon and Pepco are spending big money in ad and lobby money to pressure the D.C. Public Service Commission (PSC) to reverse its rejection of the merger. The PSC recently agreed to review the Bowser-Exelon settlement deal on an expedited two-month timeline, including only one public hearing held during working hours on November 17.

RSVP for the Hearing on November 17

This deal has never been about what’s good for District residents. As proposed, this takeover was about Exelon reducing the risk of its failing generation business with a stable revenue stream – provided by Pepco customers – and lining the pockets of Pepco shareholders. The question now is what has this deal become for the mayor and who else benefits if it goes through?

To answer that we need an independent investigation of the facts.

Allison Fisher is the outreach director for Public Citizen’s Climate and Energy Program

Despite fierce public opposition and a decision by the D.C. Public Service Commission (PSC) to deny Exelon’s acquisition of Pepco, Mayor Muriel Bowser cut a deal with Exelon that would allow the Chicago-based corporation to take over Pepco.

And while the mayor, with Exelon’s CEO at her side, was announcing the deal on October 6, the mega-utility’s lawyers were filing a motion insisting that the D.C. PSC fast track the approval of the takeover.

Specifically, Exelon is asking the PSC to reopen the merger case and consider the settlement as part of the original proposal rather than filing a new application.

This is significant because: exelon sm black x

If successful, it would allow the mayor’s backroom deal to further erode the public process that resulted in regulators rejecting the takeover. The initial proposal was reviewed and deliberated over for nearly a year and included several public hearings and an ample public comment period that led the commission to declare that the proceedings generated more interest and more active participation by the public – which largely opposes the merger – than any other proceeding in the commission’s 100-plus years of operations.

It is perhaps this demonstrated public interest and opposition to the takeover that is driving Exelon to push for an expedited review that cuts out the public. Exelon’s request would likely mean no new public hearings and, if granted, a truncated public comment period.

Exelon’s fact track motion coupled with the mayor’s backroom negotiations could shatter the public trust in the very processes established to protect energy consumers in the District.

It represents a significant flip-flop by Mayor Bowser. On September 28, just days before the settlement was announced, the mayor’s office confirmed that it was negotiating a deal with Exelon and stated that the government would support the treatment of any settlement with Exelon as a new application that would “be presented to the PSC for review, public comment and final determination.”

But at Exelon’s bequest, the mayor has abandoned that commitment and has filed a letter in support of Exelon’s fast track scheme.

It demonstrates Exelon’s deftness in manipulating D.C. regulatory rules to suit its purpose. D.C. municipal regulations clearly state that settlement agreements can be submitted only prior to the issuance of a final decision.

Exelon argues in its motion that the PSC’s final order to reject the merger is not actually final because Exelon still has an opportunity to ask the PSC to reconsider its decision and that the PSC’s response to its request for reconsideration would constitute finality of the case. It is at this point that Exelon’s argument takes a trip down the rabbit hole, since appeals for reconsideration can only be heard on the record before the commission, where no new or additional evidence is to be received – such as presumable a package of new conditions to the existing proposal.

It is perhaps this apparent misinterpretation of the law that brings Exelon to its final argument: “The commission can and should waive any rule that stands as an obstacle.”

Exelon, with an assist by the mayor, is clearly attempting an end run around established D.C. PSC procedure – and should be stopped from setting a dangerous precedent.

Responses to Exelon’s motion are due today. It is important to note that only interveners to the takeover proceeds can formally respond. Attempts by the public to weigh in on Exelon’s fast track scheme have been denied by the PSC because, as the agency notes, it cannot accept public comments because the record has been closed.

Public Citizen is calling on the PSC to deliver the same message to Exelon and force it to file a new application and submit to a new proceeding that allows the public to fully scrutinize the negotiated deal between Exelon and the mayor. And we are calling out Mayor Bowser for reneging on your commitment to support a full public review process.

Allison Fisher is the Outreach Director for Public Citizen’s Climate and Energy Program

On Monday, Exelon filed a request for the D.C. Public Service Commission (PSC) to reconsider its denial of the Chicago-based corporation’s bid to take over the District’s utility, Pepco Holdings Inc. At the same time, the mayor’s office issued a brief statement confirming that it is negotiating with Exelon on a new application that purportedly will address the shortcomings of Exelon’s previous proposal.

exelon sm black xThe PSC likely will dismiss Exelon’s tenuous request for a rehearing, which leads to the next step in the process: Exelon will resubmit the revamped proposal. It is unclear when this will happen, but when it does, we expect it to be wrapped up in a bow and heralded as Christmas comes early for the District. But ultimately – regardless of how much money Exelon offers Pepco shareholders, or how many concessions the company pledges to make – Exelon’s second takeover attempt, like its first, should fail. Here’s why:

1) The whole is greater than the sum of Exelon’s concessions:

Exelon bears the burden not only of proving that the takeover would not harm consumers, but that it would result in clear and tangible benefits to D.C. electricity customers. The PSC found that most of Exelon’s benefit claims were inflated, unsubstantiated or inadequate and that the deal could harm consumers and undermine D.C.’s sustainability goals.

In its second filing, Exelon is likely to promise whatever it thinks is necessary to get the deal done. But any new concessions Exelon offers would still be reviewed in the context of whether the acquisition as a whole is consistent with the public interest. The PSC was clear in its decision that this deal is fundamentally a bad fit for the District. New concessions would likely come in the form of short-term gains that would not mitigate the long-term risk of allowing the largest utility in the county – with its outdated business model – to swallow D.C.’s local utility.

2) Inherent conflicts:

By design, this acquisition cannot be in the public’s interest because Exelon’s business model – which seeks to increase profits and offset the heavy losses being incurred by its unregulated nuclear plants – is in conflict with the best interest of Pepco customers and is misaligned with the District’s clean energy goals.

Exelon CEO Chis Crane frequently alludes to energy efficiency and renewable energy as being counterproductive to Exelon’s bottom line and considers these technologies as incongruous and disruptive to Exelon’s business. As a result, Exelon is notoriously hostile to clean energy at the federal and state level. The PSC was right to illuminate this conflict and the threat to D.C.’s clean energy goals under an Exelon regime in its decision to reject the takeover.

Unless Exelon sells off its toxic generation business, the PSC should reject its revamped proposal on the same grounds.

3) Public opposition:

Thousands of public comments calling on the PSC to reject the deal were submitted into the record and hundreds of people turned out to public hearings to voice their opposition. In fact, in the announcement rejecting Exelon’s bid to acquire Pepco, regulators noted that the merger proceedings generated more interest and more active participation by the public – which largely opposes the merger – than any other proceeding in the commission’s 100-plus years of operations. Those that lined up behind Exelon did so out of financial interest, not public interest.

A number of groups that receive financial contributions from Pepco and have been promised that the money will keep coming in under an Exelon regime have supported the takeover. It is likely that these groups, at Exelon’s urging, will show up at the new rounds of hearings, but as before, the PSC should recognize this conflict of interest and elevate the public’s voice over those with financial ties to Pepco and Exelon.

4) Home ruled:

It’s incredible that a town that has fought so hard for local governance is considering a deal that would give away our decision-making power over our energy future to corporate executives located 700 miles away and make our local utility a second-tier company in a much larger corporation whose primary interest is in selling power, not providing the best value for its customers. Isn’t it bad enough that Congress controls our budget? Like the inherent conflicts of interest, the PSC should not find anything in Exelon’s new proposal to resolve this deal breaker.

 5) D.C. doesn’t need Exelon:

The District has had much to complain about with Pepco. That is not disputable, but Pepco has improved reliability in the past few years and is expected to meet advanced reliability standards established by the PSC. Exelon has offered no improvement beyond what Pepco is already on track to achieve. That’s because this deal has never been about making Pepco a better company for D.C. This deal is about Exelon reducing the risk of its failing generation business with a stable revenue stream – provided by Pepco customers.

Pepco was not for sale until Exelon approached the utility with an offer that included a $1.6 billion windfall for its shareholders. D.C. didn’t ask for Exelon and we still don’t need them.

D.C. decision-makers should continue to reject Exelon’s power grab. There is no fix that would make this deal good for D.C., the public opposes it and D.C. doesn’t need the merger to achieve reliable electricity service. Regulators got it right the first time. To continue entertaining this deal is a waste of precious resources and time for those tasked with protecting the public’s interest in this matter. It’s time to let D.C. residents get back to the business of building an affordable, reliable and clean power supply for the District.

Allison Fisher is the outreach director for the Climate and Energy Program

Business for Democracy

Amid the chaos of House Speaker John Boehner’s resignation, the Corporate Congress next week still will find time to undermine the public interest, with a particular emphasis on energy:

  • At 10 a.m. Tuesday, the U.S. Senate Environment & Public Works Committee will pick apart President Barack Obama’s efforts to make our air cleaner. According to the name of the hearing, lawmakers will focus on the economic implications of Obama’s “air agenda.” We expect they will downplay the benefits of pollutant-free air, such as fewer cases of asthma, respiratory illnesses and premature death.
  • At 10 a.m. Thursday, the Senate Banking, Housing & Urban Affairs Committee will mark up a bill to lift the country’s longtime ban on oil exports. As Public Citizen has told lawmakers (PDF), this is a bad idea. Lifting the export ban would erode domestic surplus stockpiles and allow domestic producers to sell oil oversees for higher prices than what they charge in the U.S. This would result in higher gasoline prices for U.S. motorists and small businesses. What’s more, ending the oil export ban would do little to advance perceived U.S. geopolitical interests regarding Russia, China and elements of the Middle East without simultaneously impacting energy supplies and prices in the U.S. market.

Budget riders

Regardless of who becomes the next House speaker, once Congress moves to adopt an omnibus funding package, it will be forced to grapple with an array of dangerous policy riders on appropriations bills – riders that have no business being attached to funding legislation.

Riders being proposed would jeopardize policies that restrain Wall Street abuses; guarantee clean air, food and water; ensure safe consumer products and continued access to vital health care services; keep homes and workplaces safe; prevent consumer rip-offs; and hold big corporations accountable for wrongdoing.

A coalition of 180 groups has urged (PDF) all 535 members of Congress and the White House to oppose spending bills that contain inappropriate and ideological policy riders. A separate coalition called on Obama to veto (PDF) any spending bills containing riders that would further weaken our nation’s campaign finance laws. Meanwhile, Public Citizen’s petition telling congressional leaders to pass a clean budget without riders has garnered more than 25,500 signatures.

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