The $6.8 billion merger of Exelon and Pepco has come under intense scrutiny in Maryland with several coalitions and state officials opposing the acquisition. Approving the merger would bode well for Maryland’s energy consumers as well as the state’s economy. Ultimately, the state should treat this as a productive business decision.

The merger easily cleared the major federal hurdle last fall. The Federal Energy Regulatory Commission (FERC) authorized the merger in November, concluding that the acquisition is consistent with the public interest and dismissing concerns that ratepayers would be harmed as speculative and unfounded.

The promise of a stronger economy and a stronger grid clearly indicate the merger is in the public interest. In the most recent proposal, Exelon is offering $94.4 million — $128 a customer — for its customer investment fund. Maryland counties are moving in the right direction in their response to the proposal. On March 17, Montgomery and Prince George’s counties, which represent all of Pepco’s Maryland customers and nearly three-fourths of Pepco Holdings’ total customers in Maryland, reached an agreement with Exelon and Pepco.

Exelon and Pepco have committed to provide Maryland with more reliable power, promising to cut power outages by 40 percent and restore power 43 percent faster compared to the 2011–2013 period.

Baltimore Gas & Electric (BGE) has achieved its best-ever levels of reliability and customer satisfaction after becoming part of Exelon in 2012. Wayne R. Fraizer Sr., president of the Maryland-Washington Minority Contractors Association, emphasized that business opportunities improved after Exelon acquired BGE, and expects the Pepco merger to provide even more opportunities.

Several coalitions and officials have criticized the potential merger, commenting that Exelon is pro-nuclear and anti-renewable, that Exelon’s market power would be too big, and that it presents a risk to Maryland’s ratepayers. Yet many of the concerns voiced by groups opposed to the merger are unfounded, misguided or serve to protect special interests — not Maryland ratepayers.

Exelon is Maryland’s largest producer of carbon-free energy, which is largely nuclear but also derived from wind and solar. However, environmental activists disapprove of the merger, claiming that Exelon opposes development of renewable energy and citing its investment in nuclear power and opposition to a generous subsidy to wind power. If one believes carbon-free energy is important to combat climate change, it should not matter what source of energy provides that energy.

In fact, Maryland taxpayers and energy consumers will be better served if the government does not pick winners and losers by subsidizing expensive energy technologies that cannot compete in the marketplace without the crutch of the federal government.

Opponents have also raised concerns over Exelon’s concentration of market power, arguing that consolidated market power will result in less competition and unregulated power. But utilities are heavily regulated, and their share of the market is irrelevant. In the approval of the merger, FERC shows that the applicants conducted a common and widely-accepted measurement for market concentration and concluded the proposed merger would not adversely affect competition of electricity generation.

That is not to say that breaking down a heavily regulated and concentrated electric utility sector is a bad idea. The idea that electric utilities serve consumers best as natural monopolies by producing energy at the lowest possible cost is untrue and borne of companies and politicians lobbying for special protection from competition. However, the merger will have no effect on wholesale reform of the regulatory structure of electric utilities. Further, de-monopolizing the electric utility industries is a policy decision to be deliberated by federal and state governments – not through a merger agreement.

Approving the Exelon–Pepco merger presents an opportunity for Maryland to approach a normal business transaction with logic and rationality.

Maryland’s Public Service Commission has until April 8 to make a decision on the merger. Evidence suggests that approving Exelon’s acquisition will create new opportunities, and businesses and communities in Maryland’s will benefit from a stronger, more resilient power supply.

Nick Loris is the Herbert and Joyce Morgan Fellow at the Institute for Economic Freedom and Opportunity at The Heritage Foundation and a visiting fellow at the Maryland Public Policy Institute. Nick.Loris@heritage.org