Pepco Working to Win D.C.’s Confidence Following Request for Rate Increase

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Pepco and its parent company, Exelon, are seeking to win the trust of District electric customers after asking the Public Service Commission of the District of Columbia for an increase in the rates they charge their commercial and residential customers.

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On July 20, William A. Von Hoene Jr., the senior executive vice president and chief strategy officer of Chicago-based Exelon, David M. Velazquez, the president and CEO of Pepco Holdings Inc., and Donna Cooper, president of the Pepco Region, met with AFRO executives and editorial staff at the AFRO’s District offices. Von Hoene made it clear that his company appreciated being able to serve customers in the District.

“It is a great honor to be in the nation’s capital,” Von Hoene said. “It is a huge honor and a huge responsibility to be in the epicenter of the world. We know we have to earn that favor.”

The D.C. Public Service Commission approved Pepco’s $6.8 billion merger with Exelon in March. On June 30, Pepco filed a rate increase request with the commission saying that rising costs of operation and equipment justify an average increase of $4.36 per customer, Cooper said in a company release.

The increase will have to go through a public comment period and hearings before a D.C. Council vote on the increase take place. If an increase is approved, it won’t take place until the summer of 2017.

Concerns about the rate increase have been voiced by District political leaders including D.C. Mayor Muriel Bowser (D), D.C. Council members Mary Cheh (D-Ward 3) and Charles Allen (D-Ward 6) and advisory neighborhood commissioners including Andy Litsky, who chairs ANC 6D in Ward 6. In addition, the Office of the D.C. Attorney General and the People’s Counsel have filed documents with the D.C. Court of Appeals seeking reconsideration of the commission’s decision to approve the merger.

Velazquez said that customers have nothing to fear from the rate increase.

“It has been three years since the District has had a rate increase,” he said. “There probably won’t be a residential rate increase until 2019 and we can help people with their bills as well. We want to make sure the impact [of the rate increase] is as minimal as possible.”

Velazquez said that there is a residential aid discount program in place to make sure that the effect of any increase is limited on the most vulnerable customers, such as seniors and low-income electric users.

Cooper said that she and her staff will continue to engage District residents by explaining the rate increase process at ANC meetings.

Velazquez said the merger’s economic benefits will help District residents and businesses.

“We have put in $5 million for workforce development programs in the city and we have a commitment to hire more than 100 union workers and other job commitments,” he said.

In addition, Von Hoene said that he will be moving to the District to set up an Exelon office in the near future.

Velazquez said that Pepco’s minority business contracting program “blows other people’s [companies] away in terms of execution and commitment.

“We have a robust program,” he said. “We have done $1.4 billion [in work] with minority and women-owned businesses. We realize that working with a Fortune 500 company can be daunting for a small firm so we have a designated person to work with an individual firm so they can be successful.”

Von Hoene said he understands that rate increases aren’t popular and is committed to working with District leaders to get them to see Pepco’s viewpoint.

“This is a long process and we will keep interfacing with the community,” Von Hoene said. “The various comments that have been made are extremely valuable to us and we are grateful for opposing views and will listen to suggestions.”