December 10, 2020
The Office of the People’s Counsel for the District of Columbia has filed an initial brief stating the reasons why the DC Public Service Commission (PSC) should reject Pepco’s application to increase rates. In the brief filed yesterday, People's Counsel Sandra Mattavous-Frye reiterates OPC’s opposition to both of Pepco’s Multiyear Rate Plans (MRPs) which, if approved, would increase rates by $135.9 million or more by January 1, 2022. OPC recommends that the Commission, instead, decide this case based on Pepco’s traditional rate filing while implementing mitigation measures so that District ratepayers do not see the impact of any rate increase at this time.
“The only winners in this case are Pepco and its shareholders,” the People’s Counsel says. “District ratepayers are hurting due to the COVID-19 pandemic, and Pepco’s MRP proposals will only make the situation worse.”
On April 24, 2020, the District’s Chief Financial Officer asserted it will take “most of calendar year 2021 for the economy to recover the ground that it has lost” with the unemployment rate peaking at 18%. It is inconceivable that District residents and businesses can withstand a rate increase of this magnitude amid the current economic climate.
OPC’s brief thoroughly explains how approval of a three-year MRP would only serve Pepco’s interest and would weaken regulatory oversight. Pepco has claimed it will offer COVID-19 relief programs and “freeze rates” but only if the Commission approves one of the MRPs. Pepco has claimed that it is “freezing rates” for all customers until 2022, but if the Commission approves the MRP, commercial customers will see an immediate 60-70% increase in the volumetric portion of their bill.
On January 1, 2022, residential customers will see a 26% increase in their distribution service charges, and another higher jump in 2023 when Pepco is done offsetting rates with the money it already owes back to customers. The rate increases will not end there, Pepco has also stated it intends to file another rate case in 2022.
OPC is appalled that the company is misleading customers and giving ultimatums to the Commission.
As noted by the People’s Counsel, “The Commission encouraged Pepco to investigate alternative ratemaking as a way to support the District’s modernization and climate goals, but neither of Pepco’s MRPs comes close to meeting the legal requirements for approval or helping the District reach its environmental goals, and they fail to serve the public interest of District ratepayers.”
OPC’s brief explains that while Pepco claims its MRP proposals support the District’s climate and modernization goals, the Company has made no changes to its business model, and its proposals include no projects that would support these goals.
If approved, these game-changing plans would amount to a three-year advance of capital to Pepco on the backs of ratepayers, less regulatory oversight and transparency, and limited opportunities to control Pepco overspending on projects.
“I want consumers to know that throughout this 18-month-old case, marked by the challenges of COVID-19 and questionable behavior by Pepco, OPC has remained focused on ensuring that the rates charged for their electric service will be just and reasonable. I strongly urge consumers to make every effort to submit written comments opposing Pepco’s MRP to the Public Service Commission by the close of the record on December 23,” said People’s Counsel Mattavous-Frye.