The Potomac Electric Power Co. asked the Maryland Public Service Commission yesterday for a 12.3 percent rate increase that would add about $5 a month to average electric bills.

At the same time, the Virginia Electric and Power Co. told the Virginia State Corporation Commission it wants to add another 50 cents a month to the emergency rate increase it requested last month. Average Vepco bills would rise by about $5.50 a month if the full request is approved.

The power companies said they need to raise rates because of inflation and higher operating costs.

The Pepco rate increase would cost that company's Maryland customers $48.5 million a year if approved in full. The Vepco rate request now totals $37 million, an increase of $3.5 million from the $33.5 million the company asked last week.

Pepco press officer Dawn Fleming said about half the $48 million is needed to pay for higher wages, supplies and other operating expenses, which have increased because of inflation.

The remaining$24 million would allow Pepco to increase the profit it earns in Maryland. Pepco is permitted to earn a 9.12 percent profit on its investment and has asked to increase that to 10 percent.

Pepco president W. Reid Thompson said part of that money would be used to pay higher dividends to Pepco's stockholders. Pepco has raised its dividends by 16 percent in the last five years, he said, while the cost of living has increased 46 percent in the same period.

Thompson said he and other Pepco officials, "share completely our customer's concern about higher electric rates, as well as higher prices generally, but we must adjust our prices to reflect the current cost of service."

The last Pepco rate increase in Maryland was one of 3.9 percent, approved by the Public Service Commission in July. At that time, the PSC refused to allow Pepco to increase its profits and rejected much of Pepco's claim that higher costs required higher rates.

Basic electric rates account for about 80 percent of a Pepco bill, the remainder is made up of fuel charges that are increased when the cost of fuel burned in Pepco plants increases.

In Maryland, Pepco's fuel adjustment charge has not been raised since October and is not expected to be increased this year, Fleming said. Pepco burns coal in most of its power plants and coal is the cheapest fuel available.

In contrast, customers of Vepco have paid steadily rising fuel charges this year and face further increases in the light of Vepco's new request yesterday.

Vepco depends heavily on nuclear power plants to generate its electricity. Several Vepco nuclear plants have been shut down recently for repairs, forcing the utility either to use expensive oil-burning plants or to buy power from other utilities at higher costs.