The Maryland Public Service Commission yesterday tentatively approved a $14.1 million rate increase for the Potomac Electric Power Co., an increase that is expected to add about $1.50 a month to a typical homeowner's bill
Commission officials said that new rates reflecting the increas, $5 million less than the utility company sought, likely would go into effect before June 1.
Pepco executives would not comment on the commission's decision, although one official told a reporter in Baltimore that the company was "disappointed."
The PSC's decision yesterday was in sharp contrast with the outcome of Pepco's last rate case in Maryland a year ago. After approving some $66 million of Pepco rate increases during the previous three years, the PSC denied a $24 million proposed boost in May 1978 and ordered a small price rollback of $248,000.
When Pepco filed its most recent rate increase request on Jan. 18, company Chairman W. Reid Thompson said that "prices must be increased to reflect inflationary increases in the costs of providing reliable service and of meeting mounting environmental control expenditures."
Yesterday's rate increase approval was made under terms of Maryland's "make whole" regulatory law guidelines, permitting utilities to increase rates on order to achieve already permitted levels of profitability and without inaugurating an entirely fresh rate case.
Pepco is authorized to earn a profit of 9.2 percent on its investment in facilities to serve Maryland customers but was earning about 8 percent last year, the company told the PSC. In yesterday's decision, the agency denied some fees Pepco had included in its proposed rate base - such as a disputed Pennsylvania tax that he not been paid - and said $14.1 million increase would bring in enough revenues to each permitted profit levels.
Pepco serves more than 275,000 customers in the most populated suburbs of Washington, including most of Montgomery and Prince George's countries. Average residential bills have been about $45 a month but all-electric homes consume much more electricity, which results in higher bills.
The PSC permitted Pepco to include in its rate base a projected 6 percent increase in wages after a current contract with workers expires May 31. However, three unions are battling to represent the Pepco workers, and no negotiations on a new contract have been started. Votes by workers for union representation are scheduled to be counted today by the National Labor Relations Board.
Although neither commission nor utility officials would estimate the precise effect on customer's bills of the laatest rate boost, information supplied to the commission earlier this year, indicated that the increase would amount to about $1.50 a month for the typical residential customer.
The commission must review the company's specific tariff proposals before giving final approval to the increase.
Still pending is a Pepco request filed nearly two years ago for a $45 million rate increase in D.C. Final briegs in that case were filed last June. Pepco has attributed a recent decline in profits to the absence of a decision in the District case.