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PEPCO seeks 12% rate hike in D.C.
(Published March 6, 2006)

The cost of electricity for most consumers in the District of Columbia is expected to rise in June.

Potomac Electric Power Co. (PEPCO) officials on March 3 filed a proposed new schedule of power generation rates with the D.C. Public Service Commission as a result of new contracts the local electric company has signed with suppliers.

The proposed new rates, which generally are deemed approved under the District’s electric deregulation law as long as PEPCO follows proscribed competitive bidding procedures in its contracting process, are expected to raise residential bills by about 12 percent and small commercial enterprises’ bills by about 10 percent.

A statement issued by the D.C. Public Service Commission noted that PEPCO’s solicitation process for new power supply contracts was conducted "under the direction of the [commission]." The commission will accept public comments on the proposed new rates until March 10.

PEPCO said the new rates, which are expected to take effect June 1, will raise the average monthly electric bill for its D.C. residential customers by about $8.33, based on an average current bill of $69.21. The rates apply to consumers in the District who have not selected an alternative electricity supplier.

Electric distribution rates for D.C. consumers remain capped, under the District’s deregulation law, until August 2007 for most consumers.Bills will not increase June 1 for individuals who participate in PEPCO’s Residential Aid Discount program. The District’s deregulation law capped generation and transmission rates for those lower-income individuals until February 2007, and their electricity distribution rates remain capped until August 2009.

"While PEPCO’s filing unfortunately represents a potential increase in electric bills, by directing PEPCO to enter into longer-term contract, we have helped reduce consumers’ exposure to volatile market conditions," Public Service Commission Chairman Agnes A. Yates said in a written statement.

The commission called the rising power costs "in large part, a reflection of an increase in the costs of fuels (primarily natural gas) to produce electricty, which was exacerbated by the affects of Hurricanes Katrina and Rita."

Between 1999 and 2005, natural gas prices rose a total of 400 percent, fuel oil prices rose 300 percent and coal prices rose 150 percent, according to PEPCO officials. Last year alone, fuel oil prices rose 76 percent and natural gas prices increased 67 percent, they said.

Yates urged conservation measures by consumers and advised low-income residents to inquire about their eligibility for home heating assistance, weatherization and other energy conservation programs offered by the D.C. Energy Office.

PEPCO officials also urged consumers to conserve energy to keep their bills lower. They said consumers can call (202) 833-7500 for information and assistance with registering for the company’s "budget billing" or energy assistance programs and to request any of the company’s brochures, including one entitled "85 Ways to Save Money and Energy."

The electric company’s 235,000 D.C. residential and commercial customers will receive detailed individual notification by mail of the new rates that will affect their account, PEPCO officials said.

Copyright 2006 The Common Denominator