Potomac Electric Power Co. asked yesterday for an $81.1 million D.C. rate hike--the largest rate increase in its history--but moved to soften the impact of rising costs on low-income families.
At the same time the company filed for the 17.8 percent increase in electric rates, it also asked that rates for low-income families be reduced 6 percent from current levels. If approved, that part of the request would provide relief for 20,000 to 25,000 households that meet eligibility standards, Pepco said. The increase requested yesterday would not apply to those families, company officials said.
According to Pepco, the rate request would increase the typical residential customer's bill about $6 a month from $28.13 now. Pepco, which filed its request less than three months after a $23.3 million rate increase went into effect in December, said the increase was needed to cover increased operating costs and higher financing costs.
Pepco also asked for an additional $9.29 million increase to go into effect if the D.C. City Council adopts a gross receipts tax.
The requested rate hike was denounced immediately by D.C. People's Counsel Brian Lederer as unnecessary.
"If you look at the financial health of the company, they don't need these increases," he said. "The only reason for filing it is because they are big spenders--out of control." The money is needed to finance construction costs that exceed what they should be, he said.
"Poor folks are not the only ones suffering from the increased cost of electricity. So is Metro. So is the District government. So are all of us," Lederer said.
"The best thing is to withdraw the case."
Pepco spokesman Dave Boyce said "Pepco has one of the smallest construction programs of any utility in the country. The small size of the construction program is one of the reasons costs have risen less than inflation."
Pepco Chairman W. Reid Thompson, Pepco's chairman of the board and president, noted yesterday that electricity prices for D.C. customers have risen less than prices generally. Even so, "We are especially sensitive to the impact of price increases on low-income customers and recognize that the proposed increase could create additional hardships," Thompson said.
The D.C. Public Service Commission has maintained relatively low rates over the years for customers who use less than 500 kilowatt hours of electricity a month--a level that provides for basic minimal use. He said this is because additional construction is to provide capacity for more air conditioning and for commercial buildings, and customers who don't benefit from that extra capacity should not pay for it.