Utility watchdog petitions for Affordability Proceeding regarding high Pepco and Washington Gas bills

The Office of the People's Counsel filed a petition with the PSC to evaluate energy affordability and create and protect measures to improve energy affordability for residents and businesses. Their petition points out ever-increasing distribution rate hikes that have resulted in high utility debt (arrearage) and shutoffs + disconnection notices. (Search ARDIR2025-01 and ARDIR2025-02 in the PSC e-docket for specific numbers).

From Pepco’s latest numbers, over 20% of all customers are in debt with the utility, and more than half of all low-income customers struggle to pay their bills on time.

OPC also points out that supply chain shocks and cost of energy are up across the wholesale market but says Pepco and WGL's high rates border on unaffordable and unprecedented, threatening the financial future of DC ratepayers. Much of the increase on the distribution side is due to unnecessary infrastructure buildout and poor financial management, shown by each utility’s unwillingness to rein in costs or executive compensation. Additionally, each company’s baked in profit is immense, hovering around 10% near-mandatory return on investment, which were approved by Chairman Thompson and Commissioner Trabue.

It is worth noting that at least one PSC Commissioner (Richard Beverly) notes that investor-owned companies enjoy a return on equity (RoE) that is inflated and basically outrageous, citing that the PSC should gradually reduce the RoE to the company's market-to-book ratio. (See Beverly's dissent in FC1180, end of the document, Paragraph 6).

As more DC residents and businesses are squeezed by the greed of Pepco and Washington Gas, it is refreshing to see official offices fight back. The work obviously does not stop here: true ratepayer protections must come from both our utility regulators at the PSC and our elected officials at the DC Council.