Pepco transmission in Bethesda Credit: Bethesda Beat file photo

For the first time in at least three years, the local power utility Pepco is moving forward with a rate decrease.

The utility plans to decrease rates by about $15 million this year. The rate decrease will save the average Maryland residential customer about $1.64 per month, according to Pepco.

The utility also plans to return about $9.7 million in one-time tax savings to customers, which will provide an average credit of $10.09 per residential customer.

This year, Pepco is expected to save about $34 million thanks to corporate federal tax cuts approved by Congress. The new federal tax law slashed corporate tax rates from 35 percent to 21 percent—and local government officials said as a result the utility must pass those savings on to customers.

In January, Pepco requested approval for a $41.4 million rate increase from the Maryland Public Service Commission, which regulates utilities. In February, it reduced the rate increase to $10.7 million due to the tax savings.

Attorneys for Montgomery County, the Apartment and Office Building Association of Metropolitan Washington and the City of Gaithersburg challenged the adjusted rate increase and last month entered into a settlement agreement in which Pepco agreed to request instead a rate decrease of $15 million and to provide the one-time credit. The request must still be approved by the commission.

Lisa Brennan, a county attorney, urged the commission in an April 27 letter to approve the settlement agreement.

“Montgomery County believes that the benefits of the reduction in base rate revenue requirements and bill credit can be quickly received by all Maryland customers; resulting in just and reasonable rates that are in the public interest,” Brennan wrote.

The commission approved Pepco rate increases of $33.9 million in 2017 and $52.5 million in 2016. With both requests, the utility told the commission it would use the additional revenue to continue updating and maintaining its power lines and other infrastructure.

The commission noted in its decision to approve the rate increase last year that the utility has delivered a 22 percent improvement in reducing the frequency of power outages and a 35 percent improvement in reducing the duration of outages from 2012 to 2016.

Later this month, the Public Service Commission will hold two meetings to take resident input on the utility’s rate decrease request. The first is scheduled for 6:30 p.m. May 14 at Prince George’s Community College in Largo and the second one is at 6:30 p.m. May 22 in the first-floor auditorium of the Montgomery County Executive Office Building at 101 Monroe Street in Rockville.