Pepco Requests $60.8M Base Distribution Rate Increase
Pepco also requested additional funds to accelerate reliability improvements.
If Pepco's most recent rate increase request is approved by the Maryland Public Service Commission, typical residential customers could pay $7.13 more a month in electricity bills.
The 4.98 percent increase (based on a typical residential customer using 1,000 kilowatt hours a month) would happen only if the PSC approves Pepco's request—made on Friday—for a $60.8 million increase in base distribution rates, according to a Pepco statement.
The increase would pay for improvements that Pepco is in the process of making to its distribution system.
The improvements—which began in 2010—appear to be working: By 2011, Maryland customers receiving electricity from upgraded feeders experienced 58 percent fewer outages and a 69 percent decrease in the duration of those outages, Pepco President Thomas H. Graham said on Friday.
"We’re spending about $1 billion in Maryland over the next five years to improve reliability and modernize the grid that our customers use every day. ... Today’s filing is necessary to cover reliability enhancements to serve customers," Graham added.
Pepco also requested permission on Friday to begin a grid resiliency charge to cover additional, accelerated enhancements to the distribution system to meet the recommendations of the Maryland Grid Resiliency Task Force convened by Gov. Martin O'Malley last summer.
If approved by the PSC, the grid resiliency charge would start on Jan. 1, 2014, and would last for about three years. For a typical residential customer using 1,000 kilowatt hours of electricity a month, the charge would be $0.96 a month in the first year, $1.70 a month in 2015 and $1.93 a month in 2016, according to a Pepco statement.
In order to meet the task force's call to accelerate reliability standards and improve reliability sooner, Pepco (with the aid of this second requested charge) proposes to:
- Accelerate its next four-year tree-trimming cycle to complete the cycle in three years.
- Upgrade 12 additional feeders a year for two years.
- Put six distribution feeders underground (two in Kensington and one each in Silver Spring, Upper Marlboro, Langley Park and Greenbelt) to improve reliability on those lines, Graham said in a Friday afternoon media conference call.
The Grid Resiliency Task Force's September report acknowledged that such a charge could be necessary because accelerating improvements to the distribution system could impose "undue financial pressure on the utilities," according to the report.
The third element of Pepco's most recent rate increase request would provide Pepco with an incentive to do better: Pepco is proposing stricter reliability standards to be met in 2015, and if the standards are not met, the company proposes that it would credit Maryland customers up to $1 million.
But, "if [Pepco] achieves the accelerated standards," the company would earn an additional $1 million, the statement added.
A decision from the PSC is expected in July 2013. After the decision has been made, Pepco will determine its next steps, including if or when an additional rate increase request would need to be made, Graham said.
In July 2012, the PSC approved $18 million of a $60 million rate increase request made by Pepco earlier in the year, Patch reported.
Lezlie Crosswhite
7:23 pm on Friday, November 30, 2012
I'm trying to think of some other company or industry that tries to get the consumer to pay for the improvements, repairs, and upgrades the company should have been doing all along.
PEPCO reminds me of a little kid whining about how hard it is to do homework and keep up in class.
Katie S.
5:22 am on Saturday, December 1, 2012
I agree completely
Katie S.
5:26 am on Saturday, December 1, 2012
I could not have worded it better myself
Theresa Defino
9:15 am on Saturday, December 1, 2012
The last sentence of this story reads:
In July 2012, the PSC approved $18 million of a $60 million rate increase request made by Pepco earlier in the year
All they have done is repackage that rejected request. Why isn't that the FIRST sentence of this story? Why didn't the reporter (who wrote both stories) take the time to synthesize this information and get reactions from people regarding the request vs. writing from a press release? There are many people at the city and county level working to hold Pepco more accountable. What do they think of this audacious move?
Why didn't the reporter get the revenue and overall profit statements from Pepco and report those? This is public information.
Otherwise, just post the link to press releases from now on.
Alan
9:46 am on Saturday, December 1, 2012
This grid resiliency surcharge must be tied to stricter performance standards and regulation, i.e. the next time a derecho hits Montgomery County our new more resilient grid should not lose power. And if we do lose power more severe penalties should be imposed on Pepco.
Laura L Thornton
11:15 am on Saturday, December 1, 2012
Hi Theresa,
Thank you for your comment. I attended a media conference held by Pepco on its proposed rate increase. The additional questions that you pose could make good additional stories.
- Laura
Theresa Defino
5:35 pm on Saturday, December 1, 2012
Well, react should really be part of your first-day story unless you absolutely have no time...I do hope you can get some comments on this.
Laura L Thornton
6:09 pm on Saturday, December 1, 2012
Thanks, Theresa - We're on a pretty tight schedule, so with Patch, what might otherwise be a longer story in another publication is broken down here into a series of smaller stories. It's just a different model of journalism. Thanks so much for your comments!
Theresa Defino
9:43 am on Sunday, December 2, 2012
"A different model?" I did not plan to comment further, but that forces me to. Your bio says you have a master's a journalism and should be ashamed to offer that explanation.
I have an undergraduate and started out working for my college newspaper (30 years ago) knowing you get as many sides into a story as possible--no matter how much time you have. You email or call around--and I'm taking about public officials who are easy to reach. We are not asking for investigative journalism here (though we should be!).
When Rockville got results of its self-funded investigation in worker conduct, we got a story from a press release that was never followed up with any comments from the former city clerk who filed the discrimination complaint--or anyone else for that matter.
It's a sad day when a weak story gets defended as a "new kind of journalism." We had high hopes for Patch, but it's been a long time since I've seen any substantive stories. You're writing for a medium that is freed of the constraints of newspaper and other print media deadlines--your work should be better.
Let me rephrase that--COULD be.
Instead Patch is chock full of recopied pieces from other news outlets, police reports, stories on school lunch menus, pets for adoption, death notices, press releases and other stuff that requires no thinking or analysis by Patch reporters and editors.
My guess is your second-day story would be one graf with a poll: Speak out! Should Pepco get a rate hike?
Joe
6:56 pm on Saturday, December 1, 2012
I agree with Theresa. I'd love to see any sort of journalism. The story here is this is a repackaged request that was rejected. How could you not report that as the main story - its basic stuff.
Theresa Defino
9:41 pm on Monday, December 3, 2012
ROCKVILLE, Md., December 3, 2012—Seven members of the Montgomery County Council today issued a statement in response to Pepco’s request for a rate increase. Council President Roger Berliner, Vice President Nancy Navarro and Councilmembers Phil Andrews, Marc Elrich, Valerie Ervin, George Leventhal and Hans Riemer endorsed the statement.
The complete text of the statement:
“We oppose Pepco’s request for a rate hike. We believe Pepco’s financial fortunes should be directly tied to its performance and that performance does not justify an increase in its rate of return. As it is, shareholders have fared a lot better than ratepayers.
“We also do not believe that Pepco should be able to avoid a review of the prudence of its expenditures in return for expediting their reliability work. Rather, we believe that Pepco owes it to this community to expedite its reliability work using the traditional ratemaking process that ensures that Pepco can only recover from ratepayers costs that the Commission finds are just and reasonable. We fully expect that our County will fight this suspect, unwarranted, and unjustified request, and that the Commission will, as it has recently, protect Montgomery County ratepayers that have suffered for far too long.”
Valdecyr Alves
8:34 pm on Tuesday, March 5, 2013
Meanwhile, if anyone would like to know how I'm helping my Pepco customers to get their money back by saving significantly with Free Energy credits applied directly to their bill, don't hesitate to contact me. See picture uploaded for example. Val Alves 443-832-3711