Washington Gas and Pepco have both filed requests for rate increases with the Maryland Public Service Commission that would cost typical residential customers about $3.50 a month per utility.
Washington Gas is asking for a $35.9 million increase in base rates, according to filings with state utility regulators and a statement.
Pepco is asking for a nearly $30 million bump in its Maryland electric distribution rates, according to filings.
Both companies said they need the extra money for infrastructure upgrades to improve reliability of their systems.
Washington Gas is the natural gas utility of WGL Holdings Inc. and serves more than 1.1 million customers in the Washington region.
Pepco provides electricity to 842,000 customers in parts of Montgomery and Prince George’s counties and the District of Columbia.
This is the second consecutive year Washington Gas has filed for a rate increase, after not filing in the five years prior, according to a news release. If approved, the company expects the increase to go into effect for the December 2019 billing cycle, similar to last year’s timing.
Washington Gas customers have been paying $5.1 million in surcharges associated with Maryland’s Strategic Infrastructure Development and Enhancement statute, approved by the PSC. The surcharge, which pays for natural gas infrastructure replacement and environmental initiatives, will now be transferred into base rates, according to a news release.
“We have been investing in Maryland to enhance our system by the continued replacement of aging infrastructure under STRIDE that underscores our dedication to modernizing our system and improving service delivery,” Washington Gas President and CEO Adrian Chapman said in a statement.
Pepco’s current rates are roughly 2% below the authorized level set by the PSC, according to the company’s rate increase filing. The company said the disparity will continue if rates don’t change given investments into improving reliability.
“The company has made, and continues to make, significant investments in the electric distribution system to improve reliability and customer service,” Pepco Vice President of Regulatory Policy Kevin McGowan said in filing testimony.
“These investments are important to our customers and are necessary to meet the increasing expectations of our customers and the merger reliability commitments each year, as approved by the Commission,” McGowan said.
A typical residential customer using 863 kilowatt hours of electricity per month will see a monthly bill increase of $3.51 or 2.76% of the total bill, according to the filing.
Pepco has filed eight rate increase requests since 2010, said Maryland People’s Counsel Paula Carmody.
The Maryland Office of People’s Counsel has challenged Pepco’s $29.27 million rate increase and supports a $2.4 million decrease.
The Office of People’s Counsel is an independent agency representing residential consumers in utility company filings. The agency is always a party to these cases and hires experts to examine filings in order to challenge requests when necessary, Carmody said.
Pepco requested a $56 million rate increase last year, which was challenged by the People’s Counsel with a recommendation of $24 million, Carmody said. The PSC approved an increase of $24 million.
Carmody added the influx of filings are typically fueled by capital expenditures requiring additional funds.
Pepco spent more than $100 million on upgrades in 2018, and reported a 30% drop in electric outages and a 24-minute improvement in repair time over the last five years.
“The good news is that the reliability has improved considerably,” Carmody said. “… The more negative side is all these things do cost money.”
The PSC is hosting a pair of public comment hearings on Pepco’s request. The first was in Prince George’s County on Monday, and the second will be at the Montgomery County Council Office Building Thursday evening. Residents are encouraged to comment on the request before Chief Public Utility Law Judge Ryan C. McLean.
“These public hearings are an important part of the rate review process,” Pepco spokesman Ben Armstrong said in an email. “We are always interested in hearing from our customers and we look forward to this opportunity.”
Charlie Wright can be reached at charlie.wright@moco360.media
