Pepco’s request to raise electricity rates in the District of Columbia is being blasted by D.C.’s Office of the People’s Counsel as an effort to charge for improving service “above Third World status.” “It’s a horrendous and shameless request by a company who is falling behind in every possible performance measure,” said acting People’s Counsel Sandra Mattavous-Frye. Pepco is ranked in the bottom quarter nationwide in terms of reliability, and its poor customer satisfaction recently earned it the title of “most hated” company in America.
Pepco submitted a request last week to increase its rates in the District by about 5.3 percent, bringing the company an additional $42.1 million a year.
The change would increase the average customer’s bill by about $5 per month, according to a staff lawyer at D.C.’s Public Service Commission.
The additional revenue would help Pepco cover the costs of new standards the Public Service Commission announced this week, according to regional President Tom Graham. The new regulations require Pepco to reduce the frequency of outages by 9 percent and the length of outages by 3.4 percent every year beginning in 2013.
“The Public Service Commission has issued standards,” Graham said. “Those new standards will require an additional investment in our part.”
The utility also is asking the District to approve a surcharge of an undetermined amount in order to “make the company whole” by recovering already-incurred costs toward improving reliability, Graham said.
Pepco estimates that the new rates would take effect in April if approved.
But a staff lawyer with the Public Service Commission emphasized that the rate increase may not be approved.
The city’s utility regulator warned Pepco in 2010 that they “would make past performance a significant factor in any [future] rate case,” said commission Chairwoman Betty Ann Kane.
Pepco previously increased its rates in D.C. in 2008 by about $28 million and in 2010 by $19.8 million. The revenue from both “went to the same place” as the newly proposed increase would go, Graham said.
But Mattavous-Frye said she doesn’t buy it.
“What have they done with the money that they’ve already received?” she asked. “Why should we trust them enough to give them additional money?”
Mattavous-Frye also said the rate increase is an example of how Pepco’s parent company, Pepco Holdings, is prioritizing investors over customers “to the detriment of its customers and its infrastructure investment,” she said.
Graham emphasized that the utility is meeting D.C.’s standards and that the increase in rates will help it meet future standards.
“I have heard customers loud and clear,” he said.
