New Tax Law Leads Pepco to Reduce Rate Increase Request

A month ago, Pepco filed for a rate increase with the Maryland Public Service Commission that would add $5.14 to an average customer’s bill. The utility amended that request Monday, reducing the increase by $2.92, reflecting tax savings from the federal tax bill.

The increase could instead be $2.22.

“It really depends on what the commission decides. Any rate increase has to go through the regulatory process,” Pepco spokesman Marcus Beal said Tuesday.

Pepco released a statement Monday evening about the savings from the tax bill:

“Pepco filed today with the Maryland Public Service Commission, an update to its pending rate case that will pass $31 million in annual tax savings to customers, resulting from federal tax cost reductions. If approved by the PSC, the average Pepco residential electric customer in Maryland will see a $2.92 decrease on their monthly bill. We will work with the Commission to determine how quickly we can begin to pass these benefits along to customers.  The company intends to file later this week with the Public Service Commission of the District of Columbia a request to provide tax benefits to customers in the District.”

The rate increase was meant to cover $41.4 million for work done in 2017, the company said last month. Pepco spent about $222.9 million in the year, said Donna Cooper, Pepco region president, in a conference call with reporters.

The utility spent the money to improve safety, reliability and customer service through replacing and improving aging equipment and installing advanced equipment to automatically identify and isolate issues and automatically restore service to customers, according to a Pepco news release.

At the time of its rate increase request, Pepco noted that tax reform legislation would mean “meaningfully lower tax costs” for the company. Pepco had not yet calculated the savings that could be passed on to consumers, the company said.

Pepco has more than 566,000 customers in Maryland.

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Douglas Tallman

About Douglas Tallman

Reporter with 35 years experience throughout Maryland. Reach me at or via Twitter at @MCM-Doug


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