Potomac Electric Power Co. filed its final brief yesterday seeking a $45 million rate increase in the District of Columbia, promising that the trend toward higher electric rates will slow down if the company gets additional revenue now.
"If Pepco's present request for relief is granted, future requests for rate relief will be more modest than is required at present, consistent with general rates of inflation or less," the electric company said.
Although electricity cost increases have outstriped other living costs in recent years, Pepco profits have declined, the company complained.
Pepco said inflation has eroded its profits so badly that "in 1977 Pepco did not come close to achieving its authorized return (profit) on District of Columbia operations."
In the detailed reply made yesterday, Pepco defended its request for higher rates against criticism from the D.C. People's Counsel and six other opponents. People's Counsel last month recommended Peoco's rates be cut by $20 million a year instead of increased.
The rate increase asked by Pepco would raise the average District of Columbia residential electric bill by about $3.30 a month.
Pepco asked the PSC to add .25 of 1 percent to its profit margin in order to protest the company against loss of earnings from inflation. It also called for basing the profit margin on the 12 months through June 30, to minimize the impact of inflation. People's Counsel had argued for using 1977 data, which would result in lower electric rates.
Pepco defended the practice of charging customers for power plants while they are still under construction, saying deferring those costs would only mean higher electric bills for future customers.
"A change in the commission's practice would be an increase in the cost of capital to Pepco and hence an increased cost of service to Pepco customers," the company warned.