Pepco fined $1 million for unreliable service

On Dec. 22, the Maryland Public Service Commission (PSC), which regulates utility companies, fined Pepco $1 million for failing to uphold cost-effective electrical maintenance and restore power in a timely manner after widespread outages. Pepco had previously requested a rate hike of $68 million, which would translate to a minimum four percent increase in monthly customer bills, according to a County press release. In the same release, the Montgomery County Council announced its support of the PSC's fine and its intentions to protect ratepayers from the cost increase.

In addition to the fine, the PSC has called for Pepco to submit a five year plan for inspecting its distribution system by February, or face additional fines. Bob Hainey, Pepco's Manager of Media Relations, said that from from 2007 to 2011, the company invested $500 million into improving service systems, and will spend another $6 to $8 million by 2016. Hainey explained that the company requested the rate increase largely to defray the costs of Hurricane Irene's damage to power lines in mid-August.

Neil Greenberger, Legislative Information Officer for the County Council, said that while Pepco is making strides to minimize outages, the company's unreliable track record and its inability to properly allocate previously collected funds does not place ratepayers in a logical consumer position."In the past few years, summer and winter storms have left hundreds of thousands across the county without power because Pepco failed to take preventive measures," Greenberger said. "Weather reports should indicate to a power utility to prepare and ask for assistance from other regional crews. Because of the additional expense, Pepco doesn't have these crews on standby, which is not an acceptable practice."

Greenberger named County Council President Roger Berliner as a "driving force" in the County's effort to hold Pepco accountable for its unreliable service. He also said the Council intends for Pepco's multi-year proposal to include a number of preventive measures for expected storms. "One storm is not a factor [in the Council's dispute of the rate hike]," he said. "Pepco is not being responsive to County and customer needs, and has established its unreliable track record over a long period of time."

Although this winter has been mild so far, Greenberger believes that January and February snowstorms should indicate if Pepco's level of preparation during outages has increased, and will test the efficiency and speed of its response.

According to a recent press release, Pepco has taken steps to improve its service in the past year. Since the fall of 2010, the company has trimmed trees along more than 2,700 miles of power lines, upgraded 53 distribution feeders that serve neighborhood networks, installed 41 advanced control systems that identify outages and re-route power to speed restoration and renewed or replaced about 300 miles of neighborhood underground cable.

Hainey emphasized that Pepco, which provides electrical services to over 790,000 Maryland and D.C. customers, understands its customers' frustrations and the demand for enhanced reliability. "We recognize that we didn't meet our customers' expectations of reliability," he said. "We've heard the customers, we know how they feel and we're out there every day working to improve [our service]."