For the third time in four years, Maryland’s Public Service Commission denied the lion’s share of Pepco’s request to raise its rates. This time, the electric utility plans to appeal.
On July 12, the commission granted Pepco $27.9 million of a $60.8 million rate increase request. The approval raises the average customer’s monthly bill $2.41.
The commission broke with years of precedent by granting Pepco a portion of a $192 million upfront surcharge, known as a tracker. For that average customer, it will mean paying an additional 6 cents a month. For the utility, the charge will provide $24 million to upgrade infrastructure.
The PSC has maintained a consistent pattern of providing Pepco less than half of what it asks. In 2012, the commission gave the utility $18 million of a $68 million rate increase, but completely denied its tracker.
Pepco has filed a notice of appeal on the recent ruling in Baltimore City Circuit Court, Myra Oppel, regional communications vice president for Pepco Holdings, said in an email.
“Pepco is exercising its rights to appeal the decision because it believes the commission’s decision contains errors that a court should review,” Oppel said.
The utility will detail the specific issues it is appealing and the reasons it believes the order contains errors in a memorandum that will be filed with the court at a later date set by the court, Oppel said.
The July 12 decision is the first of the recent round of rate cases that the company has appealed, Oppel said. She did not know how long it has been since Pepco’s last appeal.
On Tuesday, Montgomery County also filed an appeal on the PSC’s ruling in circuit court. In a statement provided by the County’s Office of Public Information, County Executive Isiah Leggett called the PSC’s decision unwise and troubling.
The county was opposed to the PSC granting both the rate increase and the tracker.
The PSC did not respond to an inquiry about how often its rulings are overturned on appeal.
In its order, the commission cited recommendations of a state task force as the backdrop for approving Pepco’s tracker.
Last fall, a task force appointed by Gov. Martin O’Malley (D) recommended, in the wake of the June 2012 derecho, that surcharges might be appropriate to accelerate improvements to the grid. The Maryland Energy Administration also supported the charge.
Forecast as a thunderstorm, the June 29, 2012, derecho took the region by surprise when, within minutes, strong winds downed trees and snapped utility poles.
Just after the storm, the number of Pepco customers without power in Maryland peaked at 410,679, leaving almost 77 percent of Pepco’s 534,601 Maryland customers without lights, fans, refrigeration or air conditioning. For some customers, power was off for as long as eight days.
While the commission wrote that, to date, it found similar surcharge requests lacking, it determined that a “properly defined tracker proposal, when aligned with specific and measurable milestones and expenditures, can be appropriate.”