Pepco’s rate increase scheme falls flat as Maryland regulators cut more than half from requested
Pepco’s influence has been cracking this year: their 2024 DC rate hike was thrown out by the courts, corporate-lacky Emile Thompson resigned from the DC PSC before their new November rate case, and now Maryland regulators slashed nearly $70 million (over half!) of their requested rate hike. Alongside this win for the public, the Maryland PSC disallowed Pepco from recovering costs (i.e. raising rates) for its $164.9 million White Flint project, citing the monopoly utility was not acting prudently (or in the public benefit).
Originally, Pepco’s requested rate hike would have bumped the average bill by $10.24 per month (or ~5.8%). Following the Maryland PSC’s decision, the average bill is only increasing by $3.94, which is still an increase but significantly better. Importantly, MD PSC denied Pepco’s attempt to include increased costs based on projected expectations of inflation, labor, and capital spend, which has been shown to overly burden regular ratepayers.
Two other main items to note regarding this decision: MD PSC decreased Pepco’s ROE, or their shareholder return. While the decrease is small (from 9.5% to 9.4%), it’s far below the 10.5% Pepco requested. In addition, even more cuts are expected from this decision for a Phase II proceeding as the PSC needs to review cost removals in accordance with the newly enacted Utility RELIEF Act.
Investment into our distribution grid is necessary and important, but for-profit companies like Pepco and its parent company Exelon use vital infrastructure as means to pick the pockets of our communities. Regulators like those on the Maryland PSC truly demonstrate the importance of pushing against corporate greed and overreach, evidenced by Pepco’s attempt to socialize the cost of their investments while reaping obscene private profits.
With Janeese Lewis George likely slated to be the next mayor of DC, she can sway the power of DC’s PSC back to the people. There are two open seats in early 2027 to replace (now-vacated) Emile Thompson and Ted Trabue. Who Lewis George decides to place on the commission will determine if DC residents continue to be scammed by Pepco or forge a fairer, more affordable energy future.