Pepco customers in Maryland will see their electric bills go up, but by far less than the utility had requested after state regulators rejected more than half its proposed rate increase.
The Maryland Public Service Commission on Friday approved a $50.9 million revenue increase, less than half Pepco’s $119.9 million request. The new rates also went into effect Friday.
The commission said the average residential Pepco customer will be paying an additional $3.94 a month, and would have paid another $10.24 under Pepco’s request. That amounts to a 2.25% increase in Montgomery County, and 2.23% more for Prince George’s County customers, according to regulators.
Pepco said it views the commission’s order as “balanced” overall.
“The decision allows Pepco to continue making important investments in the electric system while also reflecting the Commission’s focus on customer affordability and near-term bill impacts,” the company said in a statement.
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The Public Service Commission also said it sought to balance infrastructure and affordability needs.
“The order is the culmination of an extensive and open examination of financial data and witness testimony, submitted by Pepco, Commission Staff, the Office of People’s Counsel and other stakeholders,” Kumar Barve, the chair of the Maryland Public Service Commission, said in a statement. “The Commission thoughtfully balanced the necessity for secure and dependable power delivery with the critical mandate of ensuring that rate adjustments remain fair for Pepco customers.”
Pepco said one project that will be impacted by the commission’s decision is the White Flint substation in Montgomery County, which it said was required to support the area’s redevelopment. But the commission said it agreed assertions by the Maryland Energy Administration and other critics that Pepco’s capital expenses for the substation’s construction “were not prudent.”
Regulators also said the company went ahead with the project despite questions about whether the additional capacity was needed.
“Costs associated with these projects are disallowed at this time. This equates to a savings of approximately $164.9 million in capital costs for ratepayers,” the commission said.
The commission also denied Pepco’s request to include increased costs based on projected expectations of inflation, labor and capital spending.
“Pepco’s rate filing reflected actual investments the company believed best supported system reliability, replaced aging infrastructure, strengthened the grid against increasingly severe weather and prepared for growing electricity demand,” the utility said.
Maryland Gov. Wes Moore thanked the Public Service Commission for its judgment.
“Plain and simple, utilities should not earn unreasonable profits while everyday Marylanders can’t afford to pay their power bills,” Moore said in a statement.
