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Maryland Politics
Posted at 05:00 PM ET, 08/30/2012

Maryland PSC may revisit Pepco rate hike ruling

The Maryland Public Service Commission indicated this week that it may revisit a ruling it made last month to award some of a rate increase sought by Pepco.


(Pat Sullivan - ASSOCIATED PRESS)

Maryland regulators rejected the bulk of Pepco’s $68 million request three weeks after a storm knocked out power to hundreds of thousands and led to widespread outrage over the length of time the utility took to restore electricity to its customers.

Regulators granted only $18 million of the request; for most of Pepco’s 531,000 Maryland residential customers, this translates into an average rate hike of $1.89 per month.

That increase may decrease if the Office of People’s Counsel has its way. In an Aug. 20 filing to the PSC, the office asked regulators to revisit a portion of their ruling that allows Pepco to recover costs for smart meters. It remains unclear how much the rate hike would drop.

On Wednesday, the PSC told Pepco, AARP Maryland and other interested parties that they have until Sept. 28 to provide input. Pepco intends to do so, spokeswoman Courtney Nogas said in an e-mail.

The OPC argues that Pepco shouldn’t be reimbursed for smart meters because it failed to show that they’re cost-effective to customers. In the past, the PSC rejected smart-meter funding for similar reasons, the OPC noted in its ruling.

However, the PSC can break from past rulings, Deputy People’s Counsel Theresa V. Czarski said Thursday. “We’re just waiting for the next steps after they hear from the other parties,” she said.

Pepco is currently undergoing a multi-year effort to install about 400,000 smart meters in Maryland. In its July ruling, the PSC said that because Pepco requested funding for smart meters already installed, in use and “useful,” the company should receive compensation.

“We are solely allowing recovery of these specific meters already installed,” the PSC wrote. It said it will allow compensation for “broader … deployment” only when Pepco proves the system’s cost effectiveness.

Still, the OPC says the PSC’s reasoning “opens a hornet’s nest of potential problems.” The ruling was based on data from many months ago. Since then, Pepco has invested tens of millions of dollars into its smart meter program. These already-incurred costs could play a part in the utility’s next rate hike proposal, expected to come later this year.

By  |  05:00 PM ET, 08/30/2012

 
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