Pepco will soon implement its first distribution rate increase in a decade for its D.C. customers, raising average residential bills by about $1.75 a month, far less than the utility had sought but still more than observers thought it deserved.
The power company applied for a 7.79 percent increase in late 2006, which the D.C. Public Service Commission drastically scaled back in its final ruling.
Under the commission’s order, the average monthly statement for Pepco’s 235,000 residential customers is expected to increase by $1.74, or 2.27 percent, to roughly $78.38.
The new rates are slated to take effect Feb. 20.
“We’re pleased that they made a decision and provided an increase,” said Robert Dobkin, Pepco spokesman.
The distribution increase across all rate classes will add about $28 million a year to Pepco’s bottom line, significantly less than the $50.5 million initially sought by the company. But Pepco’s critics were still disappointed.
Bruce Oliver, a consultant for the Apartment and Office Building Association of Metropolitan Washington, said the rate increase provides for an “unnecessarily high rate of return given the risks that Pepco as a regulated utility faces as a business.”
“We thought the overall result was a little on the generous side [in D.C.],” Oliver said.
The D.C. Office of the People’s Counsel, which represents taxpayers in rate cases, had urged the commission to reduce Pepco’s distribution rates by $31 million, arguing the utility was “earning more than the cost it incurs to provide distribution service” in the city, the OPC said in a statement.
“The commission’s ordered rate design is “not just and reasonable,” OPC said.
According to documents filed by Pepco on Wednesday, the typical residential customer using 750 kwh per month will pay $82.88 in the summer months and $75.16 in the winter months, up from $81.24 and $73.35, respectively.
