Potomac Electric Power Co. yesterday requested a $19.1 million, 5.2 percent rate increase in Maryland that would raise the monthly bill of an average customer by $2.06, company officials announced.
Pepco chairman W. Reid Thompson said the company has "aggressive programs to control operating and construction expenditures"but that, "Our prices must be increased to reflect inflationary increases in the costs of providing reliable service and of meeting mounting environmental control expenditures."
Pepco has received $66.1 million in rate increases in Maryland during the past four years.The company's last request there, however -- for a $27.2 million, 7.6 percent increase -- was turned down eight months ago by the Maryland Public Service Commission in an unprecedented decision. The commission ordered the company to roll back its rates by $248,000.
Yesterday's filing with the commission was made under the terms of a new "make whole" provision in the utility rate law that allows companies to increase rates in order to earn a rate of return that had previously been approved.
In its application to the commission yesterday, Pepco said it was earning an overall rate of return of only 8 percent on its Maryland rate base. It is authorized to earn 9.2 percent.
The overall rate of return is what the company is allowed to earn on its investment in generating plants and other capital equpment in order to pay interest on its bonds and dividends on its stock to investors.
Pepco has 276,000 MARYLAND CUSTOMERS. The average residential bill there is about $45 a month, a company spokesman said.
Pepco has a $46 million, 16 percent rate increase request pending in the District of Columbia, where it serves 186,000 customers.