Pepco's performance

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Wednesday, December 29, 2010

WHEN THE LIGHTS go out for Pepco consumers in the Washington region - and that's not an infrequent occurrence - the power company has had a recurring response: It talks about the trees. An area so lush in vegetation is just naturally prone to more and longer outages, the refrain has been. But it seems the trees have gotten a bum rap; the real and bigger problems have to do with failures with the utility's equipment. Pepco and the agencies that regulate it need to better focus their attention on solving the issues that have rendered this important service unreliable for thousands of area residents.

An analysis by Post reporters Mary Pat Flaherty and Joe Stephens revealed that the company, which services 778,000 customers in the District and neighboring parts of Maryland, ranks at the bottom of national reliability studies. The power goes out more often here and stays out longer. The average Pepco customer suffered 70 percent more outages than customers in other big cities surveyed, and the outages lasted twice as long. Pepco's failures occur even in fine weather.

Pepco officials did not challenge The Post's findings; to their credit, in fact, they have owned up to the need to do better. They pointed out they are implementing a plan to spend $100 million on improvements in Maryland and $90 million in the District over the next five years. The costs, of course, will be passed on to ratepayers - an extra $1 a month if approved by regulators. The trade-off may be fair - if the agencies that regulate Pepco insist on results. The deteriorating service in recent years reflects poorly not only on Pepco but on the public service commissions that regulate the utility. The District is ahead of Maryland in at least establishing standards for reliability, but more standards need to be toughened.

Other states hold utilities accountable for non-performance. If companies don't hit certain standards, there are penalties to shareholders, reduction in rate hikes and even credits to consumers. The concept behind this performance-based ratemaking is simply if you perform, you get the rates. We would urge the public service commissions in the District and Maryland to move to this sensible approach and, if they refuse, for lawmakers to insist that they do.

It's inevitable there will be times when the circumstances of weather - and yes, falling tree limbs - will plunge people into darkness, but Pepco's failure in non-eventful times underscores the need for new interventions.


© 2010 The Washington Post Company

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