The Maryland Public Service Commission this week rejected a request from Potomac Edison that would have increased electricity service rates.
In a Tuesday ruling, the commission agreed with the Maryland Office of People’s Counsel that the utility’s proposal would unfairly burden current customers and that the company can protect itself by submitting studies more frequently, according to an OPC news release.
According to the OPC, the PSC decision avoids $11.2 million annually in rate increases and decreases current customer rates by $2.1 million a year.
“Potomac Edison customers will see lower electric bills as a result of the Commission’s order,” said People’s Counsel David S. Lapp of OPC, an independent state agency that represents residential utility consumers. “We are pleased the Commission adhered to long-standing principles, rejected Potomac Edison’s effort to have its current customers pay more than their fair share, and required the rate decreases to be implemented immediately.”
Potomac Edison says it serves 400,000 customers across parts of Maryland and West Virginia.
The case addressed the time period over which Potomac Edison may recover from customers the costs of its infrastructure, such as its substations, poles, and other equipment, the release states. Those costs are recovered from the utility’s captive customers over time, often 30 years or more. The schedule for recovering those costs is called the “depreciation” schedule. The case addressed Potomac Edison’s schedule, as well as how to reflect the value of the assets—or their negative value, reflected in decommissioning costs—at the end of the schedule. The Commission had earlier ordered Potomac Edison to file a depreciation study because it had not done so in 25 years.
Potomac Edison had sought to change longstanding PSC policy for how depreciation should be set, according to the release, and sought to delay the decrease in rates until its next rate case. The PSC ruled that the decrease in customer rates should be implemented immediately.