Potomac Electric Power Company (Pepco) on Dec. 19 said that it has filed a request with the Public Service Commission of the District of Columbia for approval to increase rates by $66.2m for capital expenditures in 2016 and 2017 that the company said are necessary to ensure continued safe and reliable service for customers.
Based on the request, the typical Pepco D.C. residential customer using 648 kWh per month would see a monthly bill increase of 9.24%, or about $7.54, the company said.
According to the application, the increase would be effective on or before Jan. 1, 2019.
The proposed rate increase is based on a 12-month test year ended Dec. 31, 2017, comprised of historical data for the eight-month period ended Aug. 31, and forecast data for the four-month period ended Dec. 31. Pepco added that it also requests a return on equity of 10.10%, which the company said would allow it to earn a reasonable return on funds invested in the business.
Pepco noted in its statement that it is not proposing any modification to the use of the $25.6m Customer Base Rate Credit and recommends it continue to be provided to residential customers, including master-metered apartments, as well as some small commercial customers until it expires in July 2019.
The company said that it spent $89.9m in 2016 to improve the distribution system’s safety and reliability, as well as improve customer service. Pepco noted that it plans to spend $96.4m in 2017 on such reliability projects as replacing and improving aging equipment, as well as installing advanced control systems to automatically identify and isolate faults and restore service to customers.
The company said that as a result of its work, since 2011, District of Columbia customers have seen 50% fewer outages and 63% shorter outages for those that do occur.
Pepco said that electric system projects in 2017 have included:
- Upgrading 29 feeders
- Replacing or installing 11 miles of underground cable
- Replacing 25.4 miles of aerial cable
- Installing 65 reclosers – equipment to auto-restore power after momentary interruptions
In its application, Pepco noted that as customers use the grid differently by adding distributed resources, feeding excess generation back to the grid, or changing load patterns by charging electric vehicles at night, Pepco must make the necessary modifications to keep up with those changes.
As noted in the application, Pepco is a wholly owned subsidiary of Pepco Holdings LLC, which is an indirect, wholly owned subsidiary of Exelon (NYSE:EXC).