Pepco delivers its rate case turkey

As reported in the Washington Post and in the blog, Talking Stuff, Pepco has finally filed its rate case with the Maryland Public Service Commission. Pepco seeks permission to increase rates on its regulated distribution services, citing increased labor and equipment costs. They had hinted as much in recent investor financial filings. Pepco sibling Delmarva Power simultaneously filed a similar rate case.

Pepco's filing at the MD PSC
Pepco's press release
Info on Pepco's web site about delivery service and costs
Frequently Asked Questions on Pepco's web site

The timing of Pepco's filing is clever from a PR and political standpoint. They filed during a rare window when the public and politicians are not paying attention.

The Friday before Thanksgiving is a great time of year to deliver bad news and minimize attention from a distracted public with family and travel plans on their mind.

Not only did they time it post-election, but this also happens to be a once-every-four-years lame duck window for state and county government. There was a large turnover in the state legislature, and county councils. We have a new County Executive in Montgomery. The governor's office has switched parties. Many officials and insiders are busy jockeying for positions in County and State government.

It remains to be seen how fast this case will move. The PSC plans their first meeting about the rate case on November 29th.

As judged by their campaign contributions, Pepco officials clearly favored Ehrlich in the governor's race. I wonder if O'Malley is hoping this one takes the fast track so that he can say that it didn't happen on his watch.

SP

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Update: The Examiner also covered the story:

"Though cost is an important factor, a reliable system is even more important," said Thomas H. Graham, president of Pepco Region, a unit of Pepco Holdings Inc."

Pepco's picks for the election

A review of the campaign finance database reveals which Maryland candidates are the largest recipients of campaign contributions from Pepco employees and the Potomac Electric Power Company PAC during the current election cycle. Here is a list of the recipients of at least $1,000:

Bob Ehrlich for Maryland Committee 27,175.00
Friends of Dereck Davis 12,226.41
Marylanders for Mike Miller 8,000.00
Friends of Ulysses Currie 3,500.00
Friends of John Astle 2,186.44
Friends of Doug Duncan 1,910.00
Exum for Senate 1,500.00
Friends of E.J. Pipkin 1,500.00
Friends of Mike Busch 1,375.00
Citizens for Brian Feldman 1,300.00
Friends of J. Lowell Stoltzfus 1,250.00
Friends of John F. Wood, Jr. 1,250.00
Friends of Michael Vaughn 1,200.00
Friends of George Leventhal 1,140.00
Friends of Brian Moe 1,135.00
Friends of Rona E. Kramer 1,000.00
Citizens to Elect Dick Sossi 1,000.00
Michael Steele for Maryland Committee 1,000.00


Governor Bob Ehrlich is the big winner, receiving the maximum $6,000 in PAC contributions and over $27K in total contributions. The largest chunk of the contributions were received during a five day span in late December 2003 and several of them were at or near the maximum $4,000 from individual Pepco executives. Competitor Martin O'Malley is mysteriously absent although his running mate, Delegate Anthony Brown received a token amount of Pepco money.

Next in line comes Delegate Dereck Davis from Prince Georges County, Chair of the powerful Economic Matters Committee which oversees electric utilities. Delegate Davis' largest individual contributor was Ms. Therese Yewell of Beltsville, MD who lobbies for Pepco in Annapolis ($1,000). He also received $4,000 from the PAC.

And third is Senate president Mike Miller who's district is served by Pepco. He received $5,000 in PAC money in addition to $3,000 in individual contributions.

Most of the large recipients serve in the General Assembly with the exception of George Leventhal who is an at-large member of the Montgomery County Council from Takoma Park. George sits on the transportation and environment committee which has responsibility for overseeing Pepco's service.

SP

Pepco's broken cable TV promise

Seven years ago today, Starpower received final approval from Montgomery County to provide cable television service to county residents in competition with Comcast (read original press release). At the time, Starpower was 50% owned by RCN and 50% owned by Pepco Communications, LLC (a wholly owned, unregulated subsidiary of Pepco). At the time, John McCallum was president of Pepco Communications, LLC which fell under Potomac Capital Investments (of which McCallum was also president).

In the original agreement, Starpower promised to wire 90 percent of County residents with competitive service within six years.

Now its 2006 and only a small portion of the county is covered by Starpower (now called RCN). What happened?


The only areas wired today are Gaithersburg (a separate deal from the County) and parts of Silver Spring, Takoma Park and Chevy Chase. Starpower ran out of cash and had to renege on their deal with the county in 2003. They also backed out of their commitments to Prince Georges County and the District of Columbia and other places.

A couple of years later, Pepco sold their 50% stake in Starpower to RCN communications.

Another broken promise from Pepco.

I hope the Pepco ratepayers did not subsidize their failed, risky telecom investment.

SP

Public Power in Maryland

As reported in the local Annapolis paper, public power works well in several areas of Maryland including Hagerstown and Easton. These communities have not been hit with the price spikes and broken promises seen with Maryland's large investor owned utilities. The tiny town of Saint Michaels is looking to go back to an investor owned utility.

Would Public Power be a viable solution here in Pepco-land?

SP

Maryland should be more like DC

Today's Gazette reports an attempt to wrest control of Pepco's remaining cash cow streetlight monopoly. Some local governments in Maryland, fed up with poor service and high costs want to take over ownership and maintenance of the streetlights. A bill to enable just that passed the Maryland Senate in the previous session but was held up in a house committee. Pepco is under threat of a revived bill if they don't clean up their act.

The District of Columbia Government took over ownership and maintenance of their streetlights in 1984 as part of negotiations during a big rate deal.

SP

Competition to Pepco is .... Pepco?

The Montgomery County political blog Moco Progressive reports on the Pepco rate increase and ways to conserve energy. Interestingly, Pepco Energy Services is one of the choices that Pepco customers can select as an alternative supplier of electricity generation. Pepco Energy Services offers a renewable wind energy option, however, the somehow the price of wind has somehow magicially increased...

SP

Override in Annapolis

As reported today by Steve Vogel in the Washington Post, the General Assembly returned to Annapolis to easily override Governor Ehrlich's veto of the special session electricity regulation legislation. The law has many provisions over and above addressing BGE rate increases. In one sense, it re-regulates the industry by allowing utilities to once again own power plants. Pepco customers get a tiny amount of relief and get an extension to join the interest-free deferral plan. The law also fires the People's Counsel and the members of the industry-friendly Maryland Public Service Commission and puts stumbling blocks in front of any legal challenges. Governor Ehrlich had appointed four out of the five sitting commissioners. PSC Chair and former General Assembly wunderkind Ken Schisler had filed a suit against a previous similar law. The General Assembly gets to pick a list of names for the PSC chair and members for the Governor to select. If the Governor makes no pick, the General Assembly makes the final selection. So, I wonder who will be on the short list for the new PSC?