Pepco bills may soon rise, but by less than it wants

Pepco is seeking state approval to raise its monthly rates — but by somewhat less than it initially requested.

The utility, an Exelon subsidiary that serves more than 600,000 customers in Montgomery and Prince George’s counties, applied in October for a $133 million annual revenue increase.

The average residential customer would have paid $11.73 more per month.

Pepco calculated that request by forecasting future repair costs and maintenance projects. Then state lawmakers imposed a one-year moratorium on that forecasting method.

The utility is now basing its proposed rate hike on spending for completed projects, including its new substation in White Flint, and wants approval for a $119 million revenue increase. The average customer would pay $10.24 more per month.

Robert Leming, vice president of regulatory policy and strategy at Pepco, told The Banner that requests based on spending forecasts are “probably the best form of ratemaking you can have to support customers, and we stand by that.”

But he added, “I fully support and understand folks’ interest in making sure that we’re doing our due diligence,” referring to the state’s pause on forecast-based rate increase requests.

The Maryland Public Service Commission, which regulates utilities, is expected to decide on Pepco’s proposal by Aug. 28.

Asking too much?

Pepco’s monthly rate increases have generally been a few dollars or less. The next increase would likely be among its largest in the last decade.

Pepco executives say the company needs more revenue to cover repair and maintenance projects and continue providing people with reliable electricity.

They also point out that higher generation fees charged by power plant companies — not rising utility rates — account for the bulk of energy bill increases in recent years.

While Pepco’s energy delivery fees have risen about $9 in total over the past four years, the average monthly bill has jumped from $132 to $204.

Generation fees have, on average, risen nearly $45 since 2022, according to the utility company.

Still, the state’s independent utility watchdog contends that the proposed rate increase is too high and part of a pattern of frequent rate increases since Exelon acquired it in 2016.

“Customers are suffering under the weight of these constant rate increases,” said David Lapp, who leads the Office of People’s Counsel.

After Pepco filed its initial proposal in October, Lapp argued that the utility should be reducing its rates, not raising them.

Lapp found Pepco’s updated plan slightly more palatable. He has called for the Public Service Commission to approve a revenue increase of about $15 million — more than $100 million less than what the utility is seeking.

In addition to Wednesday’s hearing, the Public Service Commission held two virtual hearings in April to give the public a chance to comment on Pepco’s proposal.

The commission has also accepted public comments submitted electronically since late 2025.

“Pepco, like the rest of us, should put the ratepayers first — not its stockholders, its executives, or its board of directors,” Rockville customer Ellen Ryan wrote to the commission in April.

She asked the commission to delay its decision until the General Assembly requires data centers and “other energy hogs” to pay for more of the area’s rising energy costs.

“Don’t just shift these massive cost increases onto everyday ratepayers, who can least afford them,” she wrote.