County opposes electric provider's increase proposal
Montgomery County officials are requesting that they get a say about Pepco's request for higher rates -- a measure the county opposes.
The county submitted a petition to the Maryland Public Service Commission, which regulates the electric utility, to allow the county to intervene on the electric utility's rate increase request with the state. Officials say the county needs a voice in Pepco's rate case to protect residents from paying more for a service that the company hasn't delivered.
"The petition reflects that our county is committed in fighting Pepco's most recent request," said County Councilman Roger Berliner, D-Bethesda.
County Attorney Marc Hansen said the county has been involved in the utility's rate requests before -- including Pepco's August proposal, which the PSC rejected. He said the latest rate increase appears to be a repeat of that request.
"We would hope that the rate increase would be rejected," Hansen said. "Based on what we know today, it doesn't appear there has been any significant change in circumstances that would justify an increase."
Pepco asked for a rate increase in November, just a few months after the commission rejected the August request.
The new proposed $60.8 million rate increase would add about $7.13 per month for the average customer beginning in July. It also would include a grid resiliency surcharge, which would add 96 cents per month starting in January 2014 and increase for two years up to $1.93 per month in 2016. The surcharge would total about $45.9 million.
Pepco, which has about 305,000 county customers, has been routinely criticized for its poor service by customers and county and state lawmakers. Elected officials from Gov. Martin O'Malley to the Montgomery County Council have criticized the utility's widespread and long-lasting outages, weak power grid and tree-trimming practices. In 2011 the company was named one of the worst companies in the country by the American Customer Satisfaction Index group.
Both the surcharge and the incentive were recommendations made by a task force O'Malley appointed to examine the state's electric grid.
The county wants to weigh in on those two items, as well as Pepco's request for an increase in its authorized return on equity to 10.25 percent.
Pepco spokeswoman Myra Oppel said it is standard practice for interested parties to participate in the rate-making process, and the company will fully participate as the process unfolds.
Hansen said the county has frequently been included in rate-making. According to the petition, because Pepco is the primary service provider for the county, it has a stake in what residents might be charged.
"These customers, which include residential ratepayers, commercial ratepayers and Montgomery County itself, have a vital interest in assuring that Pepco's rates and services are just and reasonable," the document reads.