- General Mills apologizes for ‘right to sue’ confusion, reverses policy
- Dealer wanted in U.S. for art fraud nabbed in Spain
- Easter morning delivery for space station
- Boxer Rubin ‘Hurricane’ Carter dies at 76
- Probe could complicate Rick Perry’s prospects
- Ukraine, Russia trade blame for eastern shootout
- Obamas head to church on Easter morning
- In Colorado, a pot holiday tries to go mainstream
- Ukraine PM vows to find ‘bastards’ behind anti-Semitic fliers
- Pope Francis, huge crowd joyously celebrate Easter
Most of Pepco rate increase denied for lack of reliability
Citing Pepco’s lack of reliability and failure to invest in improving its infrastructure, the Maryland Public Service Commission denied most of a requested rate increase for the utility and decreased its rate of return to investors on Friday.
Pepco had requested a 4 percent increase, which would have brought it $68 million in new revenues.
Instead, the PSC only granted the utility a 1.7 percent increase — increasing the average monthly bill by $2.02 and bringing the utility $18.1 million more. The new funds will cover verified expenses needed to provide service and meet new reliability standards and costs to comply with new statewide regulations related to contact voltage detection and prevention.
“The Commission considered instead its longer history of substandard performance, and, balancing that with the Company’s responsibility to invest in improving its infrastructure, made a number of key decisions,” the release said.
The utility also hoped the PSC would grant a near 1 percent increase in its rate of return to shareholders, bumping it up from 9.8 percent to 10.75 percent. The Commission instead decreased the rate of return to investors to 9.3 percent, calling Pepco’s request to give shareholders more money “before Pepco corrects its sub-par performance” as “backwards.”
Pepco wanted nearly $8 million of the rate increase to go toward tree-trimming costs and to cover costs for outside experts and counsel in a reliability investigation the PSC conducted last year. The commission determined that this was all work Pepco was doing to “catch up” in preventative measures, and denied the funds.
The utility also asked the commission to create a new infrastructure pre-payment surcharge. That was denied because the commission found it would burden ratepayers with financial risks that Pepco should be taking.
Although Pepco has come under fire for reliability and slow power restoration after last month’s destructive derecho storm, which left millions of customers in the dark for up to a week, the PSC wrote that its decision has nothing to do with the utility’s storm performance. The record used to decide on the rate increase closed on June 25, four days before the storm.
“Although the outages resulting from the June 29 ‘derecho’ storm and Pepco’s response to them are not, and cannot be, part of the record or our decision-making process in this case, we recognize that the statutory deadline for this decision comes at an unfortunate time,” the commission wrote.
Some critics were unhappy with the commission’s decision to raise rates at all.
“Shame, shame, shame. Pepco fails to restore power for days — and the Maryland PSC raises their rates,” said state Sen. James Rosapepe in a written statement. Rosapepe, a Prince George’s Democrat, has called for the commission to fine the utility $100 million. Proceeds from the fine would be used to implement a local relief corps for power outages.
“What don’t they understand about economics 101?” Rosapepe asked. “In a market economy, failure is supposed to be punished, not rewarded. What incentive is there for Pepco to keep the lights on if they get paid for power failures?”
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
Megan Poinski is the former deputy metro editor at The Washington Times. She has worked as a reporter, editor and web designer for more than a decade, covering mostly local, state and federal government in Ohio, Maryland and the U.S. Virgin Islands. Throughout her career, she has received reporting awards from the Scripps Howard Foundation, Capitolbeat, and Associated Press Managing ...
TWT Video Picks
Women losing coverage under Obamacare, too
- Scalia to students on high taxes: At a certain point, 'perhaps you should revolt'
- Former Ranger breaks silence on Pat Tillman death: I may have killed him
- Special Forces' suicide rates hit record levels casualties of 'hard combat'
- Feds approve powdered alcohol; 'Palcohol' available later this year
- Justice at last: 'Evil woman' outed for grabbing girl's game ball
- U.S. Navy to turn seawater into jet fuel
- Harry Reid blasts Bundy ranch supporters as 'domestic terrorists'
- Army goes to war with National Guard, seizes Apache attack helicopters
- CHARLES: Holder's undermining of the law deserving of contempt
- Joe Biden's biggest gaffe: VP blowing his 2016 head start
Top 10 handguns in the U.S.