Monday, March 10, 2014 11:32 AM
Published on: Thursday, December 05, 2013
By Holden Wilen
Seeking money to cover the cost for upgrades and reliability, utility giant Pepco is requesting a rate increase from the state.
On Wednesday, Pepco officials asked the Maryland Public Services Commission for $43.3 million in rate increases. If approved, the rates would increase by $4.80, or 3.26 percent, for the company’s 534,000 customers in Montgomery and Prince George’s Counties.
"Pepco has been focused on meeting and exceeding our customers’ expectations," said Pepco Region President Donna Cooper. “For more than three years, we have been working to upgrade our system and enhance the reliability of service for our customers. We are achieving that goal, and our work continues.”
The commission is expected to make a final decision in July 2014.
Pepco is currently working to update its infrastructure. According to company officials, Pepco spent $238.5 million between October 2012 and September 2013 on its Maryland distribution construction program, and plans to spend an additional $234 million in 2014.
"Because of this level of investments for our customers, today’s filing is necessary for us to meet and exceed customer expectations and also meet the responsibilities to our investors. Although we had a rate decision this summer, we have continued investments. Today’s request for a rate adjustment addresses work we have done since the last filing," Cooper said.
Montgomery County Councilman Roger Berliner, who chairs the council’s Transportation, Infrastructure, Energy, and Environment Committee, said it is within Pepco’s rights to ask for approval of a rate increase. However, he said the commission must heavily scrutinize the request to ensure that only expenditures which are “used and useful” are allowed to be passed through to ratepayers.
“In the most recent rate cases, the commission has found that Pepco had sought recovery of expenditures that were not proper and reduced their requests by more than 50 percent,” Berliner said. “I would fully expect our county to actively participate in this proceeding, as we have in the past in accordance with legislation that I sponsored, and work to ensure that Pepco does not pass on to ratepayers costs that are not proper.”
Berliner also said Pepco is seeking an increase in its return on equity to 10.25 percent.
According to Pepco officials, since 2010, the frequency of outages has improved by 38.5 percent, and the duration has improved by 40 percent.
However, Berliner said while Pepco has improved its performance, it has not risen to the level that justifies an increase in its return on equity. “(Pepco) is still a utility that ranks in the bottom half of all utilities in terms of performance,” Berliner said. “That is not good enough for the residents of Montgomery County and it should not be good enough for the commission.”