The Potomac Electric Power Co. yesterday asked Maryland's Public Service Commission to approve a $27 million annual rate increase that would boost an average residential customer's monthly bills by 7.6 per cent.
The Washington-based electric utility already has filed petitors with District of Columbia and Virginia regulatory agencies, seeking rate increases from its customers in those jurisdietions.
Company Chairman [WORD ILLEGIBLE] Reid Thompson said yesterday that the proposed rate boosts are based on an "inevitble, erosive pressure of inflationary increases in the cost of service," which have not permitted pepco to earn the level of profits already permitted by state commissions.
Judy DeSarno, of College Park, haead of the maryland Action Coalition, said last night she was "surprised" by the rate request because the profits for the summer months.
She said her group, a combination of consumer organizations throughout the state, would oppose the increase. In particular, she said she is "very ditressed" that a rate increase has been proposed before the state agency has been acted on a dispute over the costs of Pepco's now-aborted plan for a nuclear plant south of Washington.
The company not only spent more than $35 million ont he proposed nuclear plant but also has signed a contract to sell nuclear fuel supply contracts at a protfit. DeSarno's groupd has argued that Pepco customers should benefit in the form of wha tshe said would be a "minor" rate reduction before any rate increase is approved.
Pepco's last rate increase in Maryland took effect in January, when the public service commission approved an increase of $21.4 million a year out of $36.3 million sought by the utility .
At that time, the Maryland agency said Pepco could eran a profit of 9.16 per cent on its investment in the state for electricity service. Thompson said yesterday that nearly one-half of the new rate request - or $13.2 million - is needed just to reach the level of profitability already allowed.
In addition, he said, Pepco is seeking commission approval for a 10 per cent rate of return in the new case.
If addition, he said, Pepco is seeking commission approval for a 10 per cent rate of return in the new case.
If approved by te commission, the new Pepco increase would add $3.21 a month on winter bills and $3.79 a month during the summer for an average residential customer consuming 900 kilowatt hours a month.
A Pepco spokesman said business customers also would be charged an increase of more than 7 per cent a month under yesterday's proposal. In the first nine months of 1977. Pepco reported profits of $65.7 million compared with $56.4 million in the same period last year.
In the District of Columbia, initial documents are due Nov. 28 in pepco's request for a 16 per cent rate increase, filed in June and designed to boost the company's annual revenues by $45.5 million. For a small section of North Arlington served by Pepco, the company has requested a 21 per cent rate boost to add $3.2 million of annual revenues.
No hearings have been set for the Virginia case while in the District of Columbia public hearings are scheduled to start on Feb. 6.
Under current rate structures. Thompson said yesterday, the rate of profit permitted Pepco "is not sufficient to enable the company to maintain investor confidence and attract new capital required to finance the company's construction program."
He told Wall Street analyst in October that Pepco plan to spend $775 million over the next five years to finance construction of new facilities, needed to meet a projected modest annual growth in demand for electricity.
No more the 30 per cent of the money needed for these projects would be raised throught the pubic sale of stocks or bonds, with the balance generated from ongoing operations, he forecast.
Thompson said yesterday that Pepco has established "comprehensive cost control's and referred to a recent study for the D.C. public service commission by an outside auditing company, which concluded that the utility, has an efficient management.
If the new rate increase is approved, "I anticipate that future requests for rate (increase) can come less frequently and consistent with general rates of inflation," he added.