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Effective last Friday, Pepco was granted a rate increase in the amount of $33.9 million, with an average bill impact of about $4.01 more per month. Fixed monthly charges for residential customers are set to increase 20 cents, from the current $7.60 to $7.80. The good news is that the Public Service Commission slashed Pepco’s initial request in half – the original revenue increase requested was $68.6 million. One point of contention was Pepco’s request to recover costs for an employee incentive program that rewarded staff for achieving service reliability goals. The PSC denied a portion of this, instead scolding the company for their continued failure to achieve the service reliability benchmark related to outage frequency that it committed to in the 2015 merger of its parent company, PHI Holdings, with Exelon. The PSC also expects that this rate increase should result in significant savings to ratepayers over the next several years. Pepco additionally requested an increased rate of return on equity, from the current 9.55% to 10.1%. This the PSC also denied, instead lowering the company’s rate to 9.5%.
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