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After mass outages, Pepco waits for ruling on rate hike

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Photo - Storm damage from the June 29 derecho.
Storm damage from the June 29 derecho.
Local,DC,Alan Blinder

Pepco's plans to raise an extra $110 million through rate increases in the District and its Maryland suburbs have drawn new criticism in the wake of widespread power outages that have stretched for more than five full days.

"I think they've got a very difficult case to make," Montgomery County Executive Ike Leggett said. "I would like to see the justification for it based on what has happened thus far."

D.C. Mayor Vincent Gray has also noted "ironically" that Pepco is seeking more cash as outages become more prevalent.

Pepco, which provides electricity to roughly 256,000 consumers in the District, last year proposed to bump its rates in the city to bring in about $42 million.

The company said in a regulatory filing that typical residential consumers would see their bills climb more than 5 percent. The District's People's Counsel, which represents consumers in utility matters, opposed the request and said Pepco merited a 1 percent increase.

Pepco also asked Maryland authorities to support a 4 percent rate increase there, a hike that would add $68 million to Pepco's coffers. The company serves about 531,000 customers in Montgomery and Prince George's counties, and the average residential consumer's bill would increase $5.56.

In both cases, Pepco, which did not respond to a request for comment for this story, said the extra dollars would be used to boost its system's reliability as the company carries out an expensive five-year improvement plan.

But regulators have not yet handed down their decisions on Pepco's requests. Maryland officials, who last year fined the company $1 million, will likely issue their ruling next week.

The D.C. Public Service Commission, though, has been silent since deciding in March to extend its review of Pepco's proposal.

Whether the utility's response to last Friday's grid-ravaging storm will change regulators' thinking remains an open question, but it's not stopping politicians and consumer advocates from pressing for a Pepco defeat.

"It does increase our opposition to any rate increase until service and reliability are significantly improved," said Hank Greenberg, the Maryland senior state director for the AARP, which opposes the rate increase. "When you go to a restaurant and order a hamburger, they don't ask you to first pay for all of the equipment, the furniture and the cooking utensils."

In Washington, Ward 4 Councilwoman Muriel Bowser said her constituents were hardly satisfied customers.

"People generally think they're paying too much and getting too little," Bowser said. "As long as that's the case, the Public Service Commission has to listen to that."

Examiner Staff Writer Rachel Baye contributed to this report.

ablinder@washingtonexaminer.com

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