Before the July 19th Pepco Debriefing, Montgomery County residents express frustration with Pepco

Powerupmontco Reacts to Pepco Rate Request

Power Up Montgomery County reacts to Pepco’s recent rate increase request. Take a look.

Dear Powerupmontco Supporters and Pepco Ratepayers:

On Friday, November 30, 2012, PEPCO filed a rate request with the Maryland Public Service Commission asking for a $60,827,000 annual increase in its base revenue. Pepco also asked for an increase in its rate of return on equity to 10.25%– 94 Basis Points above the 9.31% return on equity that the PSC just allowed FOUR MONTHS AGO in the Company’s last rate proceeding, Case No. 9286. If this rate increase is approved by the Maryland Public Service Commission, PEPCO will be able to charge the typical residential customer in its base rates an additional $7.13 per month.

In addition, PEPCO is requesting the inclusion of a tracker to automatically collect from customers the costs of certain projects including proposed tree-trimming, upgrading 12 additional feeders and undergrounding 6 distribution feeders. The company admits these projects are necessary to improve the woeful reliability of its service, but PEPCO baldly declares it will not undertake these projects in a timely manner unless it is granted guaranteed revenue collection. PEPCO estimates that this tracker charge would cost the typical residential customer an additional $0.96 per month during 2014, rising to $1.70 per month in 2015, and then further escalating to $1.93 per month in 2016. The cost of JUST THIS PROGRAM to PEPCO’s customers is estimated by the company to be $192 Million.

Many of you will recall Powerupmontco’s efforts just after the Derecho of this summer. We testified before Chairman Douglas Nazarian of the Maryland Public Service Commission asking him and the rest of the commission to DENY PEPCO’s rate hike requests due its abysmal performance in restoring our power outages. The Commission agreed with Powerupmontco and denied most of PEPCO’s rate hike request, granting PEPCO only $18 million of the $68 million requested in order no. 85028 issued in PEPCO’s last rate case. In that same case, the Commission also reduced PEPCO’S rate of return on equity and refused to allow PEPCO to institute a type of tracker for advanced collection of alleged reliability improvement expenditures. The commission’s holdings in that very recent order are being challenged by PEPCO through the filing of this new rate increase application.

PEPCO’S argument in making this new rate request stems from the Governor’s “Weathering the Storm: Report of the Grid Resiliency Task Force,” dated September 24, 2012. Powerupmontco has asserted from the beginning that this Task Force Report was reviewed and approved by PEPCO prior to its issuance to the public on October 3, 2012. The Task Force Report, which resulted from an executive order of the Governor, stated it “would not recommend specific infrastructure improvements”. However, it does recommend certain cost recovery initiatives such as trackers and performance based ratemaking for Maryland’s electric utilities. The concept of performance based ratemaking is a euphemism for granting extra profits to PEPCO for achieving the level of reliable service which PEPCO is supposed to provide its customers as part of its STATUTORY DUTY AS A PUBLIC UTILITY! In other words, the Governor’s Task Force Report asks NOTHING of PEPCO WHICH A RELIABLE ELECTRIC UTILITY IS NOT ALREADY REQUIRED TO DO, but lays the groundwork for PEPCO to accelerate and expand charging Maryland customers HUNDREDS of MILLIONS of dollars.
For several years Montgomery County, through the efforts of County executive Ike Leggett, County Council President Roger Berliner, County Council member Hans Riemer, and utility law expert Stan Balis, Esq., has fought PEPCO’s requests at the PSC. From rate hikes to BSA surcharges, the County has been our advocate and has won many battles on our behalf. PEPCO’s “grid resiliency proposals” seek to undo year’s worth of advocacy work. Powerupmontco is committed to preventing this from happening.

Powerupmontco has complained directly to the Governor’s representatives about the gross unfairness of the Task Force Report. We are outraged at PEPCO’s brazen request to the public service commission for hundreds of millions of additional dollars from its customers with no significant sharing in these charges by PEPCO. PEPCO should be compelled by the PSC to financially contribute in the very significant cost of improving its dreadfully UNRELIABLE ELECTRIC DISTRIBUTION SYSTEM in order to bring its performance level up to a highly reliable level of customer service.
At this point, Powerupmontco is demanding that the Governor and the Maryland Public Service Commission give us an opportunity to participate in the new PEPCO rate case before the PSC. In addition, we want PEPCO’s charter in the state of Maryland retracted and we want the Governor and the PSC to begin the process of finding a new, responsible and reliable utility to serve Maryland ratepayers. The repulsive game playing by PEPCO, the Governor, and the PSC must end.


Abbe Milstein

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