Cheh says Pepco Executive’s pay should be tied to reliability

Cheh calls on Public Service Commission to give clear and concise explanations of future rate increases.

Washington, D.C. – Last week, Councilmember Mary Cheh (D-Ward 3) submitted written testimony to the Public Service Commission in response to Pepco’s latest request for a $44 million rate increase. This is Pepco’s fourth request for a rate increase in the past five years and this latest request comes on the heels of an approved $24 million rate increase just six months prior to Pepco’s current request. In her written testimony, Cheh called on the Public Service Commission to give serious consideration to tying executive compensation at Pepco to the reliability of their service.

“Much has been made about Pepco’s reliability – or lack thereof – during the past several years. In fact, Pepco was named the most hated company in America in both 2011 and 2012.” said Cheh. “This was largely due to the fact that Pepco customers in the District experience power outages that last much longer than outages experienced by customers in other jurisdictions. As the available data is two years old, it is possible that Pepco has made improvements—they’ve certainly promised to do so. But if not, I am deeply concerned about providing more money for less service. And to add insult to injury, Pepco continues to bring in significant amounts of revenue due to rate increases. In the past five years, Pepco has sought and received an additional $72 million in rate increases. If District residents pay more, they should get more. Because of this, I think it is long overdue for the Public Service Commission to examine tying Pepco executive compensation to the reliability of service.”

Additionally, Cheh expressed to the Public Service Commission that one of the ways to restore public trust in Pepco is for the Commission to make an effort at communicating its decisions about utility rates in summarized, plain language. Although rate case orders generally do a thorough job of explaining the Commission’s rationale for rate increases, most residents do not have the time to comb through a 200-plus page document.

“If the public is to become confident that rate increases have been thoroughly considered and ruled upon fairly, the decision and underlying rationale need to be communicated to residents in a plain and digestible fashion,” said Cheh.

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