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?

Pepco customers need love too!

The Maryland General Assembly is back in Annapolis for a Special Session. The focus has been on firing the PSC commissioners and on rate relief for BGE customers near Baltimore who might face a 72% increase. What about some help for Pepco customers who have seen equally large increases (albeit in stages)?

As reported by Ann Marimow and Matthew Mosk in today's Washington Post, there is much Maryland could learn from Pepco regulators in Washington DC. The plan is to match the way the DC handles power auctions to ease future rate increases.

What else could Maryland learn from Washington DC to better manage our public works and utilities?

The District seems way ahead in a number of areas. For example, many traffic signals in DC for years have used more efficient Light Emitting Diodes (LED) rather than Edison era incandescent bulbs. Besides reduced maintenance and energy costs, LED traffic signals can be connected to a backup power supply so that they continue to work for several hours during power outages. But here in Maryland, the State Highway Administration is still using the old technology even on brand new traffic signals. A good example is the brand new signal on Connecticut Avenue just outside the beltway.

Pepco and Mirant make nice

As reported in the Washington Post, Pepco and Mirant have settled their their long running feud that began back in 2000 after Pepco sold all of their power generating plants to the Atlanta company. Now Pepco will own a chunk of Mirant and get some cash.

Maybe Pepco can use the money to make needed investments in their core business of reliably distributing electricity. Here in the Maryland suburbs, around mid-day there was no wind or rain, just heat. Pepco's network failed.

Across the great divide of Western Avenue

Today's Washington Post carries an article by Ann Marimow and Ray Rivera about the disparities in electric rates across the boundaries between Pepco, BGE, Allegheny and SMECO service territories. Same electrons, wildly different costs.

Schisler's List (of emails)

"A top utility company lobbyist in Annapolis and Maryland's chief utility regulator have exchanged scores of e-mails, shared strategy and together met with the governor's appointments secretary as regulators were preparing to make major staff changes."

The Washington Post recently covered additional email messages showing the relationship between Public Service Commission chair Ken Schisler and an industry lobbyist. The email messages were released as a result of a Maryland Public Information Act request.

Pepco's Relief Plan

This morning's Washington Post carries a story by Martin Weil about Pepco's plan (also includes Delmarva Power) to allow customers a more gradual transition to the 38% higher electricity rates that were scheduled to take effect in June.

The Post online carries an updated story from this afternoon. Pepco lobbyist Therese Yewell is quoted. Apparently customers will not be asked to pay interest for the relief plan. It is unclear how much this will cost Pepco.

A public service commission hearing is scheduled for 2pm tomorrow.

Martin O'Malley is scheduled to announce his energy plan tomorrow.

Duncan's solution to Maryland's deregulation mess

Hello Moco
reports on Tim Craig's article in today's Post. Mr. Duncan proposes to re-regulate the industry and challenges the other candidates to follow his lead and return campaign contributions from Constellation.

Pulling the Strings

According to weekend articles in the Baltimore Sun and the Washington Post, there is a little known organization called PJM Interconnect that is largely responsible for setting rates on the newly deregulated electricity market in the District of Columbia, Maryland, Virginia, Delaware, New Jersey and other states.

www.pjm.com

Steak Dinners ala Pepco

The Washington Post today reports that Pepco and Mirant and their lobbyists have easy access to key Maryland lawmakers through lavish dinners.

Post article by Matthew Mosk


Senator Thomas M. Middleton
Delegate Dereck Davis
Rifkin, Livingston, Levitan and Silver

Delegate Richard Madaleno

Pepco
Mirant