Nobody is blaming Pepco for last Friday’s violent storm, or for the hurricane-force winds that left more than a million people in the Washington region sweltering without power in 100-degree heat. But when asked when the lights would go back on, other local utilities predicted a few days. Pepco officials said a week.
The Maryland Public Service Commission should keep that in mind next week when considering whether Pepco — which last year earned the title of “most hated business in America” for taking twice as long to restore power as other major utilities — deserves a $67.7 million rate hike. So should the District’s Public Service Commission, which is concurrently mulling a $42.5 million rate hike for city residents.
Pepco’s performance has improved somewhat since August 2010, when the Maryland PSC began investigating why the utility had one of the nation’s worst reliability records. That year, hundreds of thousands of Pepco customers were without power for up to five days following massive winter and summer storms. Last year, commission members fined Pepco $1 million — its largest fine ever — for contributing to the frequent blackouts by not maintaining its power lines and for its “inconsistent and sometimes contradictory tree trimming practices.” Residents in Bethesda inform us that before Friday’s storm, the company’s subcontractors felled a large tree in the middle of the historic Bethesda Meeting House Cemetery, which contains tombstones from the Civil War and some dating back to the 1700s.
In a 2011 full-page newspaper ad, Pepco apologized for its lack of reliability and promised to make improvements, not excuses. But as local residents testified at a public hearing before the PSC last week, there hasn’t been enough improvement to warrant a rate hike, which, said Del. Tom Hucker, D-Montgomery, would “send the wrong message to Pepco.”
Del. Hucker is right. Unlike private companies, which must work hard to attract and retain customers, Pepco is a government-regulated monopoly with a captive customer base and a guaranteed rate of return. Over the past four years, it received $508 million in federal tax breaks while earning $1.2 billion in profits. Pepco should pay for tree-trimming and power line maintenance — a necessary business expense — before it distributes any profits to its shareholders. Beleaguered Pepco customers in Maryland and D.C. have suffered enough.
