As appeals of its July rate increase progress in court, Pepco Holdings Inc. told investors on Nov. 6 that it will file yet another request to raise its rates by the end of the year.
Joseph M. Rigby, chairman, president and chief executive officer, said the outcome of the company’s most recent request makes it necessary to file another rate case. The company will also continue to work to reduce regulatory lag and ensure timely recovery of its costs, Rigby said, citing upfront surcharges as a means to that end.
“We will remain very active in the regulatory arena,” he said.
On July 12, for the third time in four years, the Maryland Public Service Commission denied the lion’s share of Pepco’s request for higher rates when it granted Pepco $27.9 million of a $60.8 million request.
However, it also broke with decades of precedent when it awarded the company $24 million upfront to fix feeders. Feeders are high-voltage lines that carry electricity from substations into neighborhoods.
The utility requested $192 million as an upfront surcharge, known as the grid resiliency charge, for feeders and other projects.
At the time, Pepco spokeswoman Myra Oppel said the decision was disappointing, a sentiment also shared by those who opposed raising the utility’s rates.
Pepco appealed the decision, as did Montgomery County, AARP of Maryland and the Maryland Office of People’s Counsel.
All four appeals, filed this summer, are waiting on a judge in Baltimore City Circuit Court to decide if the cases should be consolidated into a single appeal, physically merging the cases under a single case number. Merging the cases should make the appeals move more efficiently.
While Pepco Holdings promised to continue its annual pattern of filing for higher rates, it also reported income and stock earnings increases year-over-year for the third quarter on Nov. 6.
For the third quarter of 2013, Pepco Holdings posted $110 million in net income from continued operations, up from $87 million in the third quarter of 2012. Its earnings per share for the quarter rose to 44 cents, up from 38 cents in 2012.
Rigby attributed the results to the “positive impact of our continued investment in utility infrastructure,” along with higher distribution revenue from higher rates, increased infrastructure investments and lower operation and maintenance costs.