The District of Columbia government yesterday signed a contract to purchase the city's street-lighting system from the Potomac Electric Power Co. for $14.8 million. Under the agreement, the utility will maintain the lighting system for five years.
The purchase concludes a compromise agreement between the city and Pepco that was approved last July by the Public Service Commission. The agreement allowed residential rates in the District to be raised by 5.9 percent and gave Pepco $29.9 million in additional revenue.
It also provided for the transfer of ownership of the city's street lights to the D.C. government in exchange for a $1 million to $2 million savings in the city's annual $48 million energy bill, to be achieved through lower electric rates for street lights, traffic signals and the Blue Plains Waste Water Treatment Plant. Rates for the street lights were lowered $1.2 million.
"This agreement is equitable both to District taxpayers and to Pepco ratepayers," said Mayor Marion Barry. "The result for citizens will be long-term savings as well as the immediate savings resulting from reduced energy costs for street lighting as part of a settlement in Pepco's last rate request," he said.
"We are pleased to have this matter settled, and we think it is to the best interest of the ratepayers and the District government. What they got was control of a municipal service," said John Derrick, vice president for Pepco's customer services.
Under the agreement, the District has purchased the overhead and underground street-lighting plant and is allowed use of conduit cells within Pepco's existing underground utility ducts.
The city will use the duct space to complete the new traffic light system and connect all intersection traffic lights by cable to a central computer, Derrick said.
Pepco will maintain the underground and above-ground portions of the system and will be responsible for adding new lights or replacing old ones with more energy-efficient models. The city has the option of renewing the contract for five additional years.