NEW YORK (TheStreet) -- Pepco Holdings (POM) stock is tanking by 14.29% to $22.44 on heavy trading volume this afternoon, after key parties refused to back Exelon's (EXC) proposed acquisition.

D.C. Mayor Muriel E. Bowser had agreed to pledge D.C.'s support for the $6.8 billion merger if the companies paid the District $78 million, The Washington Post reports.  

Pepco is D.C.-based utility company, while Exelon is a utility company based in Chicago. 

The District's Public Service Commission rejected the mayor's plan last week, claiming that it wasn't in the public interest. The commission then submitted its own proposal, which was rejected by D.C.'s attorney general, chief advocate for ratepayers and Bowser, The Washington Post notes.

"The PSC's counterproposal guts much needed protections against rate increases for DC residents and assistance for low-income DC rate payers. That is not a deal that I can support," Bowser said in a statement today, The Washington Post adds. 

Bowser and eight other parties must agree to the terms of the proposal or agree to a new proposal by March 11 for the merger to move forward. 

About 22.88 million shares of Pepco Holdings have been traded so far today, well above the company's average trading volume of roughly 2.87 million shares per day. 

Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of A-.

Pepco Holdings' strengths such as its revenue growth, compelling growth in net income, good cash flow from operations, impressive record of earnings per share growth and notable return on equity outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated. 

You can view the full analysis from the report here: POM

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author. 

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