County Council Urges Montgomery County to Fight Pepco’s Proposed Rate Increase

Members say rate hike would be an 'unwarranted raid on ratepayer pockets'

April 20, 2016 9:34 a.m.

All nine Montgomery County Council members on Tuesday called on County Executive Ike Leggett “to intervene, protest, and fight” Pepco’s proposed 10 percent rate increase.

Pepco announced Tuesday it filed the rate increase request with state regulators. If granted, the increase would mean a typical residential customer’s monthly electric bill, which is currently about $152, would increase by about $15.80 per month. Pepco said it needs the rate increase, which would provide an additional $127 million in revenue, after investing $327 million in power grid improvements over the past two years.

In a letter to Leggett circulated by the office of council member and frequent Pepco critic Roger Berliner, council members bemoaned how Pepco filed the rate increase so soon after its completed $6.8 billion merger with new parent company Exelon.

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“The fact that Pepco would file for such an increase so soon after the merger underscores why our Council unanimously opposed the merger as approved,” the letter read. “Consumers face even greater threats than before. If the past is prologue, this rate increase is wholly unjustified.”

Leggett and the county government negotiated a settlement with Pepco and Exelon that included benefits for Montgomery County in exchange for the county’s support of the merger before the Maryland Public Service Commission (PSC).

Berliner helped form a coalition that testified against the merger in front of the PSC, arguing among other things that Chicago-based Exelon was pursuing the deal to help finance its large array of nuclear power plants in an era of lower natural gas costs.

It’s Pepco’s first filing for a rate increase since December 2013. In 2014, The PSC approved an increase that amounted to less than 1 percent a year on the average customer’s bill and provided an additional $8.8 million in revenue for Pepco. The utility had asked the PSC for a rate increase that would’ve brought in $37.4 million.

The 2013 rate increase request was the utility’s third in three years and Montgomery County officially opposed it. Utility companies often ask for rate increases to recoup the significant costs of operating their systems.

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“Even if the new rates are approved, Pepco customers’ monthly bills are down 9 percent from where they were five years ago because of dropping energy prices,” said Pepco’s Tuesday press release on the requested rate increase. “And many customers continue to take advantage of Pepco’s smart energy management programs to save on their bills.”

The council members wrote the county should work “to ensure that not a single penny is granted that is not 100% justified.”

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