Page 46 - Demo

Ensuring Fair Consumer Costs
Since its inception, OPC has advocated for cost-effective strategies, prioritized consumer education, and fought to advocate for savings to be passed on to consumers while insisting improvement costs be borne by utility shareholders rather than the unsuspecting ratepayer.
Washington Gas Anacostia River Cleanup
Washington Gas wanted to sell a former gas plant along the Anacostia River. In 1992,42 they sought to recover environmental cleanup expenses through utility rate hikes to get the property ready for sale in line with new environmental regulations. OPC did not oppose the cleanup but did contest passing the costs to consumers, asserting that the company was responsible for the costs that they incurred by their negligent handling of hazardous waste. The concerns didn’t stop there: Even if the rates were increased, the Office didn’t want ratepayers to fund a cleanup that they would not benefit from. The PSC did end up deciding to allow Washington Gas to use utility rate increases to recover the cleanup costs. However, the PSC also ruled that Washington Gas had to share the profits from the sale of the property — which would eventually become Maritime Plaza — with ratepayers.43
Benning Road and Pepco Battle
In 1992, a legal battle erupted when the EPA initiated a hefty fine against Pepco for hazardous material storage violations at its Benning Road facility due to a lack of required permits. In the decades that followed the beginning of the Benning Road fiasco, Pepco’s operations led to spills, equipment leaks, and deliberate releases of hazardous substances, including the highly toxic polychlorinated biphenyls. These pollutants have caused lasting damage to the environment and public health.
Finally, Pepco shuttered its Benning Road facility in 2012, and by 2017, they had reached a settlement agreement to address the cleanup costs. Pepco agreed it would not seek recovery of these costs from ratepayers. However, Pepco still attempted to include these expenses in a $53 million rate increase application in 2019. OPC voiced strong opposition and argued at the Court of Appeals that the PSC should not allow Pepco to recover from its customers $2 million in cleanup costs. In a significant triumph, the court ruled in favor of OPC, rejecting the PSC’s decision to allow ratepayers to shoulder these costs because such recovery efforts violated the 2017 settlement agreement.44
These victories were pivotal steps toward achieving environmental justice and highlight the impact that community involvement and regulatory oversight can have in shaping utility decisions — all in the name of preserving the environment and the public’s well-being.
Passing Savings Onto Ratepayers — Pepco Rate Case: Post–Tax Cuts and Jobs Act
In 2017, Pepco sought to increase retail rates for its electricity distribution service, which prompted the PSC to initiate a rate proceeding in 2018 to examine the impact of the federal Tax Cuts and Jobs Act (TCJA) on Pepco’s revenue requirements.45 Like the federal Tax Reform Act of 1986, the passage of the TCJA was a good opportunity for OPC to seek rate reductions. The tax cuts benefited Pepco, which meant their savings could be passed on to ratepayers. This accord delivered a substantial $24.1 million rate reduction to Pepco’s customers, a sizable portion of which was attributed to the TCJA.46 In addition to the rate reduction, OPC secured an $8 million enhancement to the residential customer rate credit that was initially negotiated in the Pepco/Exelon merger. These combined benefits translated into a remarkable four-year freeze on residential customer bills. OPC’s unwavering dedication to securing a fair settlement alleviated the financial burden on ratepayers and provided further proof of the agency’s commitment to safeguarding consumers’ interests and ensuring just utility rates.
46 OPC’s Journey to Protect Utility Consumers