Cleaning up for Maryland’s unfortunate approval of the deal, the DC Public Service Commission today rejected the merger between local utility and legendarily inept PEPCO and industry behemoth Exelon. The vote was unanimous, 3-0.

The D.C. Public Service Commission Tuesday denied Chicago-based Exelon’s proposed $6.4 billion takeover of Pepco Holdings, a major setback for the giant utility marriage.

The three-member commission unanimously rejected the utilities’ application, saying it was not in the best interests of the ratepayers.

The commission said it found no evidence the combination would improve the reliability of service and the panel expressed concern about a new management structure at Exelon that would not include a Pepco member on its executive committee, “thereby diminishing the influence of Pepco within the new structure.

“Pepco will become a second tier company in a much larger corporation whose primary interest is not in distribution, but in generation. At a time of change in the energy field, Pepco’s ability to adapt will be constrained by an increased management bureaucracy. We are also concerned about the inherent conflict of interest that might inhibit our local distribution company from moving forward to embrace a cleaner and greener environment.”

Pepco and Exelon have 30 days to ask the commission to reconsider.

Environmental and consumer groups had hotly contested the proposed deal. The DCPSC noted the intensity of the community involvement on both sides.

The commission cited the amount of input from both proponents and opponents to the decision, calling it one of the most important cases in the regulatory body’s history.

More than 3,000 residents, small businesses and non-profits submitted testimony on both sides. There were four community hearings and comments from 26 Advisory Neighborhood Commissions, several smart-energy groups, and at least six members of the D.C. Council.

Maryland’s PSC voted narrowly, 3-2, to approve the deal back in May.