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Montgomery County Opposes Pepco Rate Increase

Pepco-stormMontgomery County this week filed its initial brief with the Maryland Public Service Commission in Case No. 9336, Pepco’s most recent rate increase request.

“While I believe that Pepco has improved its reliability since the Derecho of 2012, largely in keeping with recommendations made in a 192-page report by my Pepco Reliability Work Group earlier, I believe that Pepco’s latest rate request is still too high,” said County Executive Ike Leggett.

Due in part to past  County opposition, $50 million in PEPCO increase requests were rejected by the Maryland Public Service Commission in 2013.

This time Pepco has requested a distribution rate increase of $37.4 million, an approximately 2.8% increase for the typical residential customer total bill.

Montgomery County has concluded that Pepco has a revenue surplus, or excess earnings, and that the rates should be reduced by $1.5 million.

Pepco has also requested an increase in their Rate of Return to 7.92%. The County supports a Rate of Return of 7.31%.

The County also continues to resist Pepco’s attempts to obtain a mechanism for approval of “forecasted reliability plant additions” prior to any objective evaluation. In this case Pepco is requesting funds in advance for certain forecasted capital costs, and then proposing a “true-up mechanism” (TUM) by which if the actual costs are less than the estimates, any shortfall would be credited back to ratepayers. The TUM would provide Pepco with most of the same advantages of a surcharge.

Click here to see a copy of the County’s brief.

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