Montgomery County Contesting Pepco Rate Increase

Officials note flaws in rate increase

By Natalie Lopez
|  Wednesday, Dec 21, 2011  |  Updated 11:44 PM EDT
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Montgomery County Contesting Pepco Rate Increase

Montgomery County is gearing up to "vigorously contest" a requested rate increase put forth by Pepco.

County Executive Isiah Leggett and County Council President Roger Berliner made an announcement Wednesday that the county will basically challenge Pepco’s recent request to raise the utility rate to $68 million.

The two men said in a joint statement that it’s “not a nice holiday gift, but more like coal in our County’s holiday stocking. Based on our initial review of the 1,000-page filing, we have concluded that the rate request is flawed in many respects, including these three major issues:

  • While pitched as only a 4 percent increase, this is spin, not reality.  In truth, Pepco's request, when considering only its distribution costs, may be more than double that amount.
  • Pepco seeks full recovery of all forecasted reliability related expenditures.  The County's position is that shareholders should bear a portion of actual expenditures to increase reliability given Pepco's imprudence in the past.
  • Pepco is seeking an increase in its allowed rate of return.  The County's position is that Pepco's rate of return should be reduced, not increased."

The men continued on to say that a good number of these issues have been waiting for a decision from the Maryland Public Service Commission since last August in its investigation of Pepco’s credibility. The County Council requested that an investigation be opened by the Commission.

"It is time for the Commission to keep faith with Montgomery County residents,” County Executive Leggett and Council President Berliner said, “by holding Pepco financially accountable for its failure to honor its fundamental public utility obligation to provide reliable power."
 

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