- The Washington Times - Wednesday, November 3, 2004

District residents using Pepco Holdings Inc. can expect to pay an average $10 more a month on their electric bill next year.

The Washington power company, which supplies power to an estimated 725,000 customers in the District and parts of Maryland, yesterday filed an 18 percent rate increase with the D.C. Public Service Commission, the District’s utilities regulator.

The rate rise, if approved, will start on Feb. 8 and be the first in the District since 1995. Pepco’s average monthly bill for D.C. residents is expected to shoot up to $66.50 from the current cost of $56.50.

Maryland customers in July experienced a 15 percent increase that pushed up their average monthly bill from $84.36 to $96.99. Pepco had warned Maryland consumers they would see most of the price jump in the winter.

Pepco spokesman Robert Dobkin said the D.C. rate was based on a competitive bidding process for a wholesale market-based price. Pepco’s electric power supply in the District was deregulated in 2001, allowing the company to become the default electricity supplier for Washington residents.

The deregulation capped power-supply rates, which were reduced by 7 percent in 2001, until Feb. 7.

Public Service Commission spokesman Richard Beverly said the commission expects to complete the rate by the end of the month. Initial public comments on the increase would be due next week.

Pepco blamed the rate increase on escalating costs for fuels that produce electricity, saying those prices pushed up wholesale power prices nationally.

“No one likes price increases, but if you consider that during the last four years Pepco’s residential rates were held below wholesale market prices for electricity, the increases are well within the range that could be expected, especially considering the cost increases that have occurred in other energy products,” said Pepco President Bill Sim.

The announcement comes after the federal government warned consumers to expect higher heating bills this winter.

Tight global markets coupled with higher crude oil prices are expected to raise heating-oil prices by 29 percent, natural-gas prices by 11 percent, and propane prices by 17 percent, according to the U.S. Energy Department.

Elizabeth Noel, peoples’ counsel for the District which represents the legal interests of D.C. utility consumers, predicts that residents will be horrified.

“This is a reflection of the fact retail competition is an experiment that did not work,” Ms. Noel said. She said that higher fuel prices were only a portion of the rate increase.

The new rates will not affect low-income customers who qualify for Pepco’s residential aid discount program. Prices for that program will stay the same until February 2007.



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