The Potomac Electric Power Co. has requested an emergency 6.7 percent rate increase for its 167,000 District of Columbia customers to take effect Jan. 1.
The company claims in its new petition to the D.C. Public Service Commission that it is suffering a "financial emergency" because the commission has not yet decided on Pepco's earlier request for a 16 percent increase. That request was filed 17 months ago.
If granted, the new request would raise electricity rates in the District almost immediately by 6.7 percent-but the increase would be subject to rollback or confirmation in the commission's decision in the larger case.
"Pepco again submits that the delay being experienced in this case is unprecedented, contrary to the public interest, and in total disregard of Pepco's serious and worsening financial condition in the District of Columbia," says the company's most recent legal brief.
The brief contains other alarming language. It predicts that the company's rate of return on common stock equity investment in facilities serving the District will be only 7.2 percent by next June-a figure that would be "45 percent below the 13 percent authorized return on equity found necessary to attract equity capital at reasonable cost."
The 13 percent return is the figure authorized by the commission in previous rate cases. It is the return paid to investors who provide the capital the company needs to build electric generating plants.
Critics of the company have argued that Pepco already has excess generating capacity and doesn't need to build more plants-thus doesn't need to attract large amounts of new capital.
Pepco's request for an emergency rate increase, filed Thursday, came in the wake of the D.C. Court of Appeals' refusal on Dec. 6 to order the commission to speed its decision in the larger rate case.
Since the case required 43 days of hearings that generated a transcript of over 5,000 pages, wrote Judge Frank Q. Nebeker in explaining the decision, I cannot say that unwarranted delay has occurred." The judge said five or six months have passed since all arguments and legal briefs were presented to the commission.
"Pepco makes a strong case respecting . . . financial impact on Pepco of the commission's "regularity lag" is "larmipng."
However, Nebeker wrote, the remedy for Pepco's problems lies in being properly compensated through an eventual commission decision rather than in having the Court of Appeals order the commission "to make a carefully detailed decision in haste."
Pepco had sued the commission in the Court of Appeals in November, an unprecedented action.