Potomac Electric Power Co. has requested a $29 million rate increase for District users.

If the hike is approved, it would come on the heels of a $35.5 million rate boost that took effect in May and a 35 percent increase in profits for the first eight months of this year compared with the 1979 period.

Pepco's request would add about $1.75 a month, or $21.17 annually, to the bill of an average residential customer.

W. Reid Thompson, chairman of the board and president of Pepco, attributed ascending rates to inflation. "The price of electricity has risen much less than the general rate of inflation because of our programs to hold down cost," he said last week. "But our cost-control efforts cannot offset entirely the effects of double-digit inflation."

The May adjustment amounted to 11 percent; the current request would add 8 percent more, a total well in excess of the current inflation rate. However, given the speed at which the D.C. Public Service Commission considers applications for rate increases, it is unlikely that any new hike will go into effect before the year is out. Moreover, the commission could well decide not to grant the entire amount requested.

Thompson said that about three-fifths of the proposed $28.9 million rate increase reflects higher costs since June 1979. Half of Pepco's costs are related to its plants. But because construction is down, those costs will rise only between 3 percent and 3.5 percent a year, according to the chairman.Fuel amounts to 36 percent of utility's costs, yet because it burns mostly coal, Pepco will not experience future cost increases above the inflation rate.

Despite its cost, Pepco's net income for the first eight months of 1980 soared by 35 percent, while operating revenues were up 11 percent. For the 12 months ended Aug. 31, net income was up 28.8 percent and revenues 9.1 percent. mThis contrasts sharply with the preceding 12-month period when income was virtually static and revenues increased about half as much.

The remaining two-fifths of the proposed increase is intended to boost the rate of return Pepco earns on its investment in plant and equipment to serve D.C. to 9.99 percent from 9.38 percent.