Residents protest Pepco rate hike proposal
By Victor Zapana,
First, it angered customers who said it couldn’t keep the power on. Then it upset them by trimming too many trees around its power lines.
Now Pepco, one of the region’s largest electric companies, wants to raise rates by 4 percent in Maryland and 5 percent in the District, boosting average residential bills by about $5.50 and $5 a month, respectively.
Hundreds of local officials, community activists and other residents have rallied against the proposal since Pepco presented its rate requests last year to the D.C. Public Service Commission and Maryland Public Service Commission .
“Pepco’s subpar service and frequent, unnecessary outages should not be rewarded with a rate increase,” Joe Edgell, an environmental activist in Takoma Park, said at a public hearing Monday.
The Maryland Public Service Commission is expected to rule on the increase by July 13. It is unclear when the District commission might reach a decision.
There is some worry that the two commissions will ignore the concerns of consumers and local officials.
“The overwhelming assumption is that the [commission] is a compliant partner in Pepco’s incompetence rather than the independent auditor,” Del. Tom Hucker (D-Montgomery) said at a public hearing this week. “Approving this rate increase would not further public confidence.”
He added that it would also “send the wrong message to Pepco.”
Pepco, which serves nearly 780,000 customers in the District and in Montgomery and Prince George’s counties, says the increase is necessary to replace aging equipment, improve reliability and prepare for growth in its customer base. The company says the rate increases would provide $111 million a year in additional revenue.
“There are always differences of opinion,” Anthony J. Kamerick, executive vice president and chief regulatory officer for Pepco Holdings, said in an interview Thursday. “We can’t give away service and ask for less than we think we need. Because what that will do is lower our financial conditions, and it will harm our credit rating. And we will be in a situation where we wouldn’t be able to function.”
Kamerick said Pepco usually requests a rate increase of about 5 percent every two or three years.
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 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 County 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.
Montgomery County Council President Roger Berliner (D-Potomac-Bethesda) and council member Marc Elrich (D-At Large) have proposed legislation to limit Pepco’s tree trimming by requiring, among other things, that the utility obtain permission from homeowners before pruning on private property.
Berliner has spoken out against Pepco’s rate proposal. Shortly after the request was made in December, Berliner and County Executive Isiah Leggett (D) said in a joint statement that it was “not a nice holiday gift, but more like coal in our county’s holiday stocking.”
Meanwhile, residents have picketed Pepco offices and attended public hearings to criticize the rate proposal. They say the company shouldn’t get a rate increase, given that its parent company reports profits of hundreds of millions a year and receives lucrative tax credits.
Instead of a 5 percent increase in the District, People’s Counsel Sandra Mattavous-Frye advocated something closer to 1 percent. “We still have delivery problems and communication problems,” she said.