The Maryland Public Service Commission (PSC) on May 30 said that evidentiary hearings for the purpose of receiving public comment regarding Potomac Electric Power Company’s application for adjustments to its Maryland retail rates for the distribution of electric energy will be held on Aug. 28 in Largo, Md., and on Aug. 30 in Rockville, Md.
Written comments may also be filed by Sept. 15, the PSC said.
As TransmissionHub reported, Pepco on March 24 submitted to the PSC the application requesting an approximate $68.6m increase in its Maryland distribution rates, as well as an authorized rate of return on equity (ROE) of 10.10%.
The impact of the requested rate increase on the typical residential standard offer service customer using 872 kWh per month is $7.37 per month, or 5.52%, the company said in its application.
Pepco also said that its revised rate schedules are submitted with a proposed effective date of April 23.
“Our focus is to provide the best possible value to our customers and to make the region a better place to live and work,” Pepco Region President Donna Cooper said in a March 24 statement. “We continue to make improvements on behalf of our customers, and continue to see a steady uptick in the reliability of our system and the responsiveness of our customer service teams.”
In its application, the company said that at current rates, its adjusted ROE for the test year – which is May 1, 2016 through April 30, 2017 – is 5.44%, a level below its authorized rate of ROE as set by the PSC. Pepco said that it is seeking the increase because its revenue growth has not kept pace with the growth in operating costs and rate base. That disparity will only increase as Pepco continues its investments to enhance the reliability of the distribution system, the company said.
The costs in this case cover investments since the last base rate case, and planned spending on reliability in 2017, Pepco said, adding that new technology has been installed that enables it to provide more reliable service in a cost-effective manner. In order to maintain and enhance its infrastructure and implement those cost-effective distribution technologies, Pepco said that it must continue to make substantial investments in infrastructure and must have a reasonable opportunity to recover its costs.
Pepco noted that in 2016, it spent $138.3m on reliability improvements to its distribution infrastructure, and that it plans to spend an additional $150.6m in 2017.
The continued investment in the distribution system is in response to the demands of stakeholders; the passage of the Maryland Service Quality and Reliability Act; the implementation of the PSC’s Service Quality and Reliability Standards; and the conditions imposed by the PSC in its order that approved the Pepco Holdings Inc., and Exelon (NYSE:EXC) merger.