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PSC To Talk Pepco Rate Hike Request Next Week

By Aaron Kraut

Friday - 4/18/2014, 11:45am  ET

Pepco pole, via Abigail ReidPepco’s request for a $43 million rate increase will go before the state’s Public Service Commission starting next week.

The power company said the application for the increase, filed in December, was necessary to pay for infrastructure improvements that have led to fewer power outages and shorter outage durations.

On Tuesday, April 22, Wednesday April 23, Friday, April 25, Thursday, May 1, Friday, May 2 and possibly Monday, May 5, the Public Service Commission (PSC) will hold a series of hearings on the rate increase request.

If approved, the increases would go into effect on July 4, 2014.

The request includes records of the $238.5 million the company says it spent from October 2012 to September 2013 to improve infrastructure. The company claims it plans to spend an additional $234 million this year.

Pepco says it has done vegetation management on 5,600 miles of overhead wire, upgraded more than 130 overhead distribution feeders and installed new or upgraded more than 860 miles of underground home distribution lines since 2010.

Those improvements, Pepco says, have led to a 38.5 percent improvement in its Average Interruption Frequency Index and 40 percent improvement in its System Average Interruption Duration Index.

Pepco critics say the privately held electric company shouldn’t get more money for fulfilling its basic duty of providing reliable electric service.

The rate increase would mean an increase of $4.80 a month for the average residential customer, according to Pepco’s filing.

In the filing, Pepco also asked for an increase in its return on equity — the allowable return on investment to its shareholders — from 9.36 percent to 10.25 percent.

Last July, the PSC approved part of Pepco’s last rate hike request, a decision that is being challenged in court. In a Nov. 6 earnings call, Pepco Chairman Joseph Rigby told investors the decision to grant $27.9 million of its $60.8 million rate hike meant the company must make another rate hike request.

That request followed in December.

The hearings will all begin at 10 a.m., unless otherwise noted. The April 23 and April 30 hearings will begin at 1 p.m., or half-an-hour after the completion of PSC’s administrative meeting.

The sessions will be a series of evidentiary hearings, in a court-like legal setting that critics of the PSC have said creates barriers to customer participation.

The PSC will hold two public comment hearings on the matter. One will be at the Executive Office Building in Rockville (101 Monroe Street) at 7 p.m. on Monday, May 12.

Written comments may also be filed by Friday, May 30, 2014, and should be addressed to David J. Collins, Executive Secretary, Maryland Public Service Commission, 6 St. Paul Street, 16th Floor, Baltimore, Maryland 21202, referencing Case No. 9336.

The evidentiary hearings next week will be held at the PSC’s headquarters in Baltimore. The hearings will be streamed live at the PSC’s website.

Photo via Abigail Reid