Some Montgomery County lawmakers have proposed forming a public-owned power utility to replace Pepco, but the initiative would face significant legal hurdles and might not make financial sense, some officials say. County councilman Roger Berliner, D-Bethesda, suggested creating a public power company in response to problems with Pepco’s reliability. The company would be created by the Montgomery County Council and would likely be overseen by an elected or appointed board of directors.
Proponents suggest that a public power company would eliminate Pepco’s revenue-driven policies that disregard customers’ needs.
“Pepco pays out … $200 million in dividends,” said Councilman Marc Elrich, D-at large. “If I’m not paying shareholders dividends, I have $200 million I can invest in infrastructure.”
Forming the company would require state legislative changes, approval by the Maryland Public Service Commission, consent from every county municipality and acquisition of Pepco’s current infrastructure, County Attorney Marc Hansen said in a memo to the council.
After those initial steps are taken, American Public Power Association Vice President of Education and Customer Programs Ursula Schryver said, the county would have to invest money into improving Pepco’s infrastructure — which has been criticized recently by the Maryland Public Service Commission for being poorly maintained.
Pepco spokesman Clay Anderson would not say how much it might cost the county to acquire the infrastructure.
No cost analysis or feasibility study has been performed yet, said Berliner. It is too early to know whether customers’ rates would change.
The process of moving to a public power utility takes several years, and local utilities usually put up a fight, Schryver said.
“It’s generally not an easy process to form a public power utility,” Schryver said. “Public power isn’t always going to be right for everyone.”
County Executive Ike Leggett said the county would be better off seeing what regulations come out of the Maryland Public Service Commission’s investigation into Pepco’s reliability.
“The public power option is out. That’s not going to happen,” he said. “It’s just not a realistic option.”
In 2009, 14.5 percent of U.S. customers used public power and 68 percent got their electricity from investor-owned utilities, Schryver said. Most of the areas using public power are smaller than Montgomery County, whose population is just under 1 million, though in Los Angeles, 1.4 million people use it.
The utility might be structured similarly to the Washington Suburban Sanitary Commission, said Hansen, with an independent board of directors that reports to the council.
“I don’t know for sure whether we could do this,” Elrich said, “but I think it would serve us well to figure it out.”
