Potomac Electric Power Co. asked the state of Maryland for an $85.56 million rate increase yesterday--a scant three months after receiving a $31.66 million rate hike.
Pepco estimated that the 15.3 percent across-the-board increase would add $7.90 to the average residential customer's monthly base rate bill of $51.70.
The base rate, calculated on average use of 670 kilowatt hours a month, does not include fuel costs, which were $18.57 in July for an average customer, down slightly from an average charge of $18.60 for the same month in 1981. The fuel costs are separately stated on Pepco bills.
Pepco said it needs the increase to keep up with inexorably rising costs.
"Despite Pepco's intensive programs to minimize expenditures, the costs of providing reliable service have been and continue to be unavoidably influenced by inflation," said Pepco President W. Reid Thompson.
"Pepco also must continue to conduct necessary financing in adverse capital markets to invest in our plant in order to maintain reliable service and comply with environmental requirements," Thompson said.
"Rates must be updated to reflect continuing increases in the costs of providing electric service since the close of calendar 1981, the year which was the basis of our last increase," according to Thompson.
In April, the company was granted a 6.3 percent increase in lieu of the 18.9 percent hike it had sought. The Maryland Public Service Commission decision meant that Pepco collected an additional $31.66 million in revenues rather than $95.5 million.
The requested increase is based on costs that include anticipated expenditures for labor under the electric company's recently negotiated contract with Local 1900 of the International Brotherhood of Electrical Workers. Labor costs are not a large factor, a Pepco spokeswoman said. Compared with fuel costs, which are equal to 42 percent of revenues, and the cost of plants in service (mainly capital costs), which are equal to 49 percent of revenues, labor costs are equal to approximately 9 percent of revenues.
Pepco serves approximately 323,000 customers in Montgomery and Prince George's counties, including approximately 295,000 residential customers.
Pepco also has pending in the District of Columbia an $88.5 million rate increase that it asked for in March. That request also followed by slightly less than three months a rate increase. Pepco argues that the lag in granting rate increases is such that it forces the company to come back quickly, seeking additional increases.