Potomac Electric Power Co. yesterday asked for a $56.4 million rate increase in the District to pay for adding electrical capacity at two of Pepco's generating plants and for conservation programs.
The first step, a 7 percent increase totaling $41.2 million, would go into effect in the District in late 1991. The second, a 2.4 percent increase worth $15.2 million, would be implemented June 1, 1992, Pepco said.
The rate increase request was filed by the utility yesterday with the D.C. Public Service Commission. If approved, it would add $5 to the average monthly bill of consumers in the District. The first increase of $3.50 would go into effect in the latter part of 1991 and raise the average bill from $32.40 to $35.90. The second increase would go into effect in June 1992 and raise the average bill to $37.20.
In the last six years, Pepco has had one rate increase. In July 1990, the D.C. Public Service Commission authorized a 1.6 percent increase in Pepco's annual revenue. Since 1987, the commission has ordered three rate reductions.
"Building a power plant and undertaking a conservation program are enormous investments and necessary for the operation of the utility -- to provide the reliable service our customers expect," said Steve Arabia, a spokesman for Pepco.
Arabia said the utility's reserve margins, or its extra store of power to serve customers at times above peak demand when a major unit is not in service, were half of what they should be. Pepco has not installed new capacity at any of its six stations since 1981.
Part of the proposed rate increase would go toward building additional combustion turbines at the company's Chalk Point generating station in southern Prince George's County and at its Dickerson generating station in northwest Montgomery County. Arabia said the combined investment in increasing capacity at Chalk Point and Dickerson is $309 million.
The rate increase also would cover the costs of several rebate and conservation programs that Pepco has launched for commercial and residential customers. The company said operating and maintenance costs also have increased.
The request covers only the portion of costs carried by 219,000 residential and commercial customers in the District. Pepco said it asked for increases for 1991 and 1992 at the same time to save the expense of an additional District rate case. Arabia said Pepco will ask for a rate increase in Maryland when the Dickerson unit comes on line.
"Even with this proposed rate increase, the cost of electricity to our District ... customers will remain below 1985 levels," said H. Lowell Davis, Pepco's vice chairman and chief financial officer. "Our electricity prices compare very favorably with regional and national averages."