Pepco Asks for Rate Raise in Maryland

by: James Wright Special to the AFRO jwright@afro.com
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Two of the District’s leading public officials are asking the city’s public service commission to reconsider its decision in the Exelon-Pepco merger as the new utility announced plans to raise rates in the District and Maryland.

The People’s Counsel, Sandra Mattavous-Frye, and District Attorney General Karl Racine requested April 22 that the District of Columbia Public Service Commission revisit its March 23 decision to authorize the merger of Exelon and Pepco. Racine said the public service commission acted incorrectly when it approved the merger.

“We believe the public service commission exceeded its authority, failed to follow their own procedural rules, and denied the District due process when it approved merger terms acceptable to Pepco and Exelon but opposed by the overwhelming majority of the other parties involved,” he said.

Mattavous-Frye echoed similar sentiments, saying, “I strongly believe that the manner in which the decision was reached was legally flawed. If the flaws in this order are not corrected, it will erode the trust and confidence of consumers and all parties that practice before this commission.”

The commission’s March 23 merger approval allows Pepco to raise utility rates within 2016 and didn’t strongly guarantee benefits such as job opportunities for District residents, credits to low-income and senior residents, and a robust community benefits package for District non-profits.

Racine and Mattavous-Frye supported a plan offered by D.C. Mayor Muriel Bowser (D) and her administration in negotiation with Exelon in early October 2015 that would have guaranteed those benefits and delay a rate increase until 2019. However, the commission rejected that plan earlier this year and accepted the alternative plan pushed by Exelon on March 23.

The commission’s reconsideration of the merger has the support of Power DC, a coalition of advocacy groups that opposed the merger. A public letter to Racine and Mattavous-Frye said, in part, that “it is unconscionable that the [commission] approved this bad idea over the objections of your office.”

“It is as if the commission was making up the process as they went along,” the letter said.

District officials concerns come as Pepco announced a request to increase rates before the Maryland Public Service Commission on April 19. Under the proposed rate increase, Pepco officials say that the typical residential bill would increase by 10 percent or $15.80 per month on an average bill that is currently $152. Pepco officials argue that the rate increase is necessary to keep pace with the service it is providing customers.

“Pepco customers benefit from the strong progress we’ve made on our commitment to accelerate investments in our system, improve reliability and modernize the power grid,” Donna Cooper, Pepco region president, said in a statement. “Our customers are realizing the results by experiencing fewer and shorter outages as a result of an upgraded electric distribution system that is more efficient.”

Pepco officials stress that the requested increase isn’t related to the merger and would have been made regardless because of rising costs to operate.

Tori Leonard, a spokeswoman for the Maryland Public Service Commission, told the AFRO that typically, rate increase requests are considered up to 150 days after being made. “We will be holding a pre-hearing on Monday, May 23 in Baltimore on Pepco’s rate increase request that will discuss the procedural schedule on how the process of considering it will work,” Leonard said.

In the District, a rate increase will be submitted later this year, Pepco spokesman Vincent Morris told the AFRO. “The cost of doing business is going up and we have to fund retirement plans and keep up with general operation,” Morris said.

That is not what Andy Litsky, who is the chairman of advisory neighborhood commission 6D in Ward 6 wanted to hear. “I knew that rates were going to go up when the public service commission voted for that bad deal,” Litsky said. “It was just a question of when.”

Litsky’s advisory neighborhood commission was one of the 27 out of 41 that voted against the merger. “How anyone could have supported the merger [on those terms] is beyond comprehension,” he said.

LaToya Foster, a spokeswoman for Bowser, told the AFRO that the mayor hasn’t publicly taken a position on what Racine and Mattavous-Frye are doing.

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