Montgomery County Executive Isiah Leggett (D) also applauded the fine but said he was more pleased with the commission’s promise to disallow future rate increases unless it improved its performance.
He pointed out that each day of outages costs businesses and consumers tens of millions of dollars. “That cost should be assumed, at least in part, by the shareholders,” Leggett said.
Consumer advocates said it was highly unusual for the commission to impose a significant penalty. Pepco could file a formal objection with the commission or ask a court to block the penalty.
The order said that tree-trimming failures led to dramatically higher outage durations and frequencies in 2010.
“Pepco’s history of inconsistent and sometimes contradictory tree trimming practices between 1999 and 2010 imposed more costs and outages on customers than otherwise would have been the case had the company adhered to one coherent strategy,” the commission order said.
Pepco’s reliability problems were amplified by the utility’s refusal to increase the frequency of its tree trimming from once every four years to every two years, the order said.
The commission also concluded that Pepco failed to conduct periodic inspections of its distribution lines and did not conduct after-storm inspections or patrols.
Those lapses contributed to poor performance in national reliability studies and increased the power system’s vulnerability to storms, the order said.
The commission was especially critical of Pepco’s inability to accurately estimate how long it would take to restore service after major storms.
The order noted that Pepco had already initiated a five-year, $300 million program to improve reliability and planned to pass the cost along along to consumers. The commission cautioned that if the program did not reduce outages, the utility might have to pay those costs itself.
“It is Pepco’s legal duty to provide reliable service to its customers,” the order concluded.
The Post’s analysis found that the average Pepco customer experienced 70 percent more outages than customers of other big-city utilities and that the lights on average stayed out more than twice as long.
Pepco’s reliability began declining five years ago, the newspaper found, but company officials failed to immediately mobilize to counteract the decline.
Staff writer Mary Pat Flaherty contributed to this report.
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