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Maryland Politics
Posted at 01:12 PM ET, 07/19/2012

Chris Van Hollen, other Md. officials urge that Pepco rate hike be denied

U.S. Rep. Chris Van Hollen (D-Md.) joined dozens of other Maryland officials Thursday in urging state utility regulators to reject a rate hike for Pepco.

In a strongly worded letter to Montgomery County Council President Roger Berliner (D-Potomac-Bethesda), Van Hollen criticized Pepco’s performance after a June 29 storm that ravaged the region and left hundreds of thousands of residents without power for days. He said that Pepco, which has been criticized before for its performance related to storms, continues to underperform.

“This is obviously part of a persistent pattern of underperformance,” Van Hollen said in an interview Thursday. “It’s the latest chapter in a longer story about underperformance, and there are a number of steps that need to be taken immediately to address this issue.”

According to an analysis by Van Hollen’s office of publicly available data, Pepco had significantly fewer line crews working than Dominion Power. Dominion also fixed a majority of its outages at a faster rate than Pepco did, according to the analysis.

Pepco has requested a 4 percent rate increase from the Maryland Public Service Commission, meaning the average residential bill would increase by $5.50. Van Hollen, who saw a utility pole fallen in front of his house during the storm, said the commission needs to “send an immediate signal” by denying the rate increase. A decision on the rate increase is expected to be released on Friday.

Maryland Public Service Commission Chair Douglas R.M. Nazarian said at a public hearing in Rockville on Thursday that his body recently adopted “comprehensive, stringent and objective high standards” and that improvements will occur “over time.”

Nonetheless, Van Hollen in his letter called for the state to further overhaul its regulations and “enact whatever additional measures are necessary to align Pepco’s interests with the legitimate expectations of its customers.”

“I think the financial incentives to the rate system need to be much more closely tied to actual performance,” the congressman said.

Pepco, which did not immediately respond to a request for comment Thursday, also has requested a 5 percent increase for its District customers, meaning an increase of $5 for the average residential bill. The company says both rate increases would provide $111 million a year in additional revenue. District utility regulators have not said when they will decide on the rate hike.

In late 2010, an analysis by The Washington Post found that Pepco customers typically experienced more power outages and waited longer for service to be restored than customers of any other big-city U.S. utility companies. The next year, Maryland regulators issued an unprecedented $1 million fine against Pepco, citing the outages and poor tree-trimming practices.

Pepco officials have acknowledged long-standing reliability problems. The company has upgraded equipment, expanded tree trimming and enhanced customer service centers as part of a five-year, multimillion-dollar effort to improve performance.

Local officials have said Pepco’s improved service has largely pleased constituents, but community activists and others in Montgomery are riled over what they call excessive tree trimming by Pepco contractors. In 2011, Pepco spending for tree trimming along distribution lines was $19 million more than two years earlier, and its contractors have trimmed along more than 3,400 miles of power lines since December 2010.

By  |  01:12 PM ET, 07/19/2012

 
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