Pepco's status as one of the nation's most reviled utilities hasn't stopped it from trying to squeeze more money out of its long-suffering customers at every opportunity. The latest example is its attempt to extract $52.1 million from 258,000 District customers with a 6.23 percent rate hike request submitted Friday to the D.C. Public Service Commission.
Pepco claims it needs more money to pay for "significant investment in infrastructure." That's the same argument the utility has used to get $72 million in rate hikes approved since 2006, including $24 million last year after June's derecho left hundreds of thousands of local residents sweltering without power in 100-degree heat.
Pepco's terrible track record had started well before then. After prolonged power outages following the February 2010 blizzard, the Maryland Public Service Commission levied a $1 million fine against Pepco for contributing to the too-frequent blackouts by not spending money it had already budgeted for trimming trees near power lines, and then blaming outages on the trees.
Pepco now claims it has learned its lesson and reduced outages 17 percent since last summer. As the People's Counsel correctly points out, Pepco should not be rewarded for restoring a basic level of service and reliability that should have been a given all along.
Pepco wants its customers to pay to fix a system that its own mismanagement allowed to fall into disrepair while it paid out $1.2 billion in profits to stockholders between 2008 and 2012. That's the real reason Pepco had 70 percent more power outages than other utilities nationwide, not because its captive customers in D.C. and Maryland weren't paying enough for lousy service.
Pepco region president Thomas Graham admitted that the latest proposed rate hike would be used in part to increase "our return on equity." So the question before the PSC is whether this government-regulated monopoly deserves a larger profit at ratepayers' expense. The answer is no.
Last fall's Hurricane Sandy, which largely bypassed D.C., and the 10-inch snowstorm that failed to materialize last week did not provide Pepco customers with a real-world test of its supposedly improved reliability. Until another major storm hits, Pepco's customers have to take it on faith that things will be dramatically better next time. But Pepco's own history shows that such blind faith is more likely than not to be misplaced.