Challenging a Pepco rate increase can be a daunting proposition, as Abbe Milstein saw again this week when the electricity company objected to her group’s intervention in its recent request for a $43 million rate hike.
State Del. Al Carr (Dist. 18), who represents parts of Kensington, Wheaton, Silver Spring and Chevy Chase, will try for the second time to pass a bill that would compensate nonprofits and groups such as Milstein’s Powerupmontco for lawyer fees, expert fees and other expenses from participating in the state’s court-like process for deciding rate cases.
“Utilities have experts and greater resources than the staff of the Maryland Public Service Commission, the Office of the People’s Counsel and all other parties combined,” Carr said on a conference call Tuesday. “While there will be some cost to the bill, I think the bill will also lead to savings from greater scrutiny of utilities.”
The bill would allow the state’s Public Service Commission (PSC) to determine a reasonable amount of compensation for groups that intervene in Pepco and other utility rate cases. Pepco’s latest request came in December, its third rate increase request in two years.
Carr proposed the bill last year but it gained little traction and was opposed by the utilities. With no sponsor in the State Senate, he admitted it faces a “heavy lift” again this year. But he’s hoping having it ready to go for today’s first day of the General Assembly will get it a longer look.
Milstein said her group, which has organized events critical of Pepco, supports the bill.
Before joining the conference call, Milstein participated in a pre-hearing conference for the most recent Pepco rate case. Her group hopes to intervene again, but on Monday was told by Pepco’s attorney that Pepco would be objecting to Powerupmontco being part of the case.
The state’s Office of People’s Counsel, the government agency charged with representing consumers in utility rate cases, also objected to Powerupmontco’s participation. The PSC on Tuesday granted Powerupmontco’s petition to intervene, over the objections of both.
“I think a lot of the parties are not comfortable that we actually have consumers that we interact with on a regular basis,” Milstein said. “These are the people that are paying the bills. The bottom line is I think we are the most direct interest in the proceedings and I think that was uncomfortable for them.”
Carr said Milstein’s group is an example of types of groups that should get help paying for expenses in the rate cases, which can go on for months and involve a multitude of hearings and testimony. Carr said Pepco and a sister company spent $1.8 million on experts in 2012.
Milstein said she relies on volunteer experts part of her group to review and analyze hundreds of pages of documents.
Carr, who said the bill is modeled on one in California, also said Pepco’s expert and legal fees eventually come out of the customers’ pockets.
“When a utility hires an expert for hundreds of thousands of dollars to plead its case, they’re able to ask to have the rate payers pay that. Embedded in our rates are those utility lawyers and experts who are arguing in the utility’s favor,” Carr said. “Under this bill, compensation for these groups would similarly come out of the rates.”
District 16 delegate candidate Hrant Jamgochian helped organize the call. He testified as an individual against the last Pepco rate increase and talked about how power outages have affected elderly members of his family.
“More than anything else, everyone wants us to address this issue,” Jamgochian said. “We’d all love to move on to the next issue.”
