Pepco’s ‘climate solutions programs’ do not belong in rate case, People’s Counsel tells Public Service Commission
BALTIMORE – A set of Pepco programs to spend $151 million over three years on new electrification projects would radically expand its role as a public utility and cause substantial long-term rate increases for customers, the Office of People’s Counsel explained in a motion filed this week with the Public Service Commission. OPC’s motion asks the Commission to strike the programs from Pepco’s rate case while allowing the company to propose them in more appropriate dockets.
Pepco’s proposal includes major new programs that would enable the company to earn a profit on rebates it offers to individual customers who buy new electric appliances or make other upgrades—resulting in total costs to customers significantly greater than the initial investment of $151 million. This profit-making proposal is contrary to several decisions over the past year in which the Commission has consistently rejected the efforts of the Exelon utilities—including Pepco and Maryland’s largest utility, Baltimore Gas & Electric—to earn a profit for providing customer appliance rebates and related measures through the State’s utility-administered energy efficiency programs.
“Pepco is proposing major policy initiatives that are not appropriate for resolution in a rate case,” said People’s Counsel David S. Lapp. “While electrification is critical for meeting the State’s climate goals, the State should be deciding how we electrify, who pays for it, and how it is paid for. These are not questions that should be decided in a rate case with a small set of parties, under a tight deadline where the utility’s proposal is the only one on the table.”
Pepco’s proposal is part of the utility’s multi-year rate plan filed in May that, if approved, would increase the distribution rate by 46 percent for a customer using 1,000 kilowatt hours each month. OPC’s filing observes that Pepco’s two largest proposals, which concern appliance rebates and electric vehicles, would be more appropriately taken up in other existing Commission cases dedicated to those issues. In those cases or a new case, Pepco’s proposals can be evaluated more fully and transparently by interested parties who are not involved in the rate case, OPC’s filing said.
“Pepco’s proposal would expand its public utility role to become the financier of customer investments in home appliances,” Lapp said. “That dramatic expansion of the utility’s role into what is essentially retail lending would come at the expense of all its customers—whether they get a rebate or not—and it should not happen in a rate case.”
Earlier this year, the Commission granted a similar OPC motion in BGE’s rate case, striking BGE’s electrification plan from the rate case while giving the company the option to propose the plan outside of a rate case.
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers of electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies and the courts.
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