This article was updated at 9 a.m. May 11.
Pepco’s request for a rate increase to pay for past and future infrastructure work met with criticism from several customers and public officials at a public hearing in Rockville Thursday.
“This is a significant increase for our residents and businesses that are already suffering under the current economic climate,” said Gaithersburg Mayor Sidney Katz, one of about a dozen people who gave testimony at the hearing.
Pepco is asking the Maryland Public Service Commission, which regulates utilities, to approve new rates projected to add a net $60.8 million in revenue each year, a change that would cost the average residential customer $7.13 more per month.
The utility initially requested a $68 million increase in 2012, but the commission granted an increase of only $18 million in July. About $1 billion in infrastructure investments are needed over the next five years to improve reliability.
But the outages that followed the June 2012 derecho storm have left many customers resenting the ultility, which they say has provided unreliable service.
“They have to this day failed to adequately repair poles [near] my house,” said David J. Thomas of Rockville, who aruged that Pepco was spending money on advertising the improvements it has made instead of completing 10-month-old repairs.
In written testimony submitted to the commission, Abbe Milstein of Rockville, who founded the group Powerupmontco after losing power for eight days following the derecho, criticized the high annual dividend yields and executive compensation packages of the Pepco’s parent company, Pepco Holdings, Inc.
Thomas H. Graham, president of Pepco Region, told The Gazette after the hearing that advertising and executive incentives were paid for with money from shareholders, not ratepayers.
“Over the last three years, we’ve been committed to improving service reliability for our customers,” Graham said. “We’ve seen double-digit reductions in the frequency of outages. Also, when outages occur, the length of them is not as long.”
The utility was now seeking recovery from expenditures that it has made, Graham said.
Pepco is also asking to implement a grid resiliency charge to fast-track certain new projects, such as burying six distribution feeders. The charge for the average customer would be 96 cents per month in 2014, $1.70 per month in 2015 and $1.93 per month in 2016. Pepco expects the charge would be in place for three years.
Customer Ellen Ryan argued at the hearing that such repairs and improvements should come out of company profits, rather than being passed on to ratepayers.
One customer — Jean Sperling of Martin’s Additions — spoke in favor of the increase, citing reliability improvements her community has seen since Pepco replaced a feeder line in 2010.
The commission must make a decision on Pepco’s request by July 12.