The OPC CONNECTION - December 2017


A Note from Your People's Counsel

OPC Representing District Consumers in Important National Policy Discussions

The Federal Energy Regulatory Commission (FERC)– the agency that regulates the wholesale market where utilities like Pepco purchase electricity – is considering a proposal that would dramatically change how these markets operate and result in higher rates for consumers. In the fall, Secretary Rick Perry of the US Department of Energy asked FERC to develop what he termed grid resilience pricing. Under this proposal, certain facilities that generate electricity would be given price subsidies. These subsidies would be paid for through increased electricity prices for utilities, costs which would be passed down to ratepayers like you. Secretary Perry argued that the closure of certain facilities would be harmful to reliability and resilience of the electric grid and that subsidies are necessary to keep them operating

While OPC knows that you expect your lights to always come on when you flip the switch, we strongly believe that DOE’s proposal will not enhance reliability but will boost your bill. Most likely to benefit from the proposal would be coal and nuclear facilities already scheduled to retire because they can no longer produce electricity at a competitive cost when compared to natural gas or renewables like wind. Keeping these facilities online, many of which are outdated, will come at considerable upfront costs as well as undercut the development of cheaper resources.

More importantly, doing so will not make the grid more reliable. For example, during the Polar Vortex – that deep cold spell in January 2014 – it became too cold for many coal facilities to operate and it was wind generation along with effective management of the electric supply that kept the heat on! When dangerous storms approach, nuclear plants often must shut down, like they did when Hurricane Irma hit Florid

OPC believes that we need a system-wide approach to reliability, and regularly works with grid partners, to ensure enough power is generated and securely transmitted to your home. The Perry proposal will not address these issues – for that reason, OPC joined with other state consumer advocates in filing comments in opposition. FERC is expected to issue an order on the proposal in early Janu

It’s fair to say that many Washington Nationals fans welcomed Exelon’s decision to pay $100,000 to keep the Metro open during a Major League Baseball playoff game so fans could take the subway home after the normal closing time. Nonetheless, OPC has received questions about how the $100,000 was covered and did it fall on the backs of Pepco ratepayers? So, we thought it would be a good idea to make a few points about what a utility can and cannot take out of your rates.

One, as a matter of law, utility companies can only recover costs from ratepayers for expenses related to operating the utility distribution network that gets energy resources to your home. For instance, the money Exelon provided to keep the Metro open late is unrelated to operating the distribution network. Therefore, if Pepco would seek to recover this expenditure in rates, OPC would identify this as an unrecoverable expense and the DC Public Service Commission will not allow it to be recovered from ratepayers. This type of expense is paid for by shareholders, not ratepayers.

Two, in addition to identifying unrecoverable expenses, OPC also ensures that allowable expenses are reasonable. As it relates to profit, OPC advocates that Pepco only make a profit that is reasonable and in line with competitive markets and other regulated utilities.

Pepco has indicated that it will file its next request to increase rates this month. In that proceeding, OPC will investigate all of Pepco’s expenses, including how the Metro money is recorded, and will verify that it will be classified as a charitable contribution that is not recoverable in rates.

It is important to note that since April 2014 to date, residential consumers have not had to pay for any Pepco rate hike because OPC successfully advocated for a rate increase credit to be included as a condition of the Pepco Holdings-Exelon merger decision

In this new section we will highlight some feedback from consumers.

This month’s employee spotlight is Consumer Outreach Specialist Cheryl Morse. Over the 11 years she has been with OPC, Cheryl has been a go-to member of the Consumer Services Division, working directly with District residents to help them resolve issues with their utility services.

A native Washingtonian, Cheryl attended the University of the District of Columbia before coming onboard. Among many responsibilities citywide, Cheryl provides outreach to communities in Wards 2 and 6, educating them about key energy issues. Her staunch advocacy for District consumers has not gone unnoticed. Advisory Neighborhood Commission 2A recently nominated Cheryl for the 17 th Annual Cafritz Award. The highly competitive program recognizes DC government employees for exemplary public service

Away from the job, Cheryl is quite busy getting her two teenage daughters to numerous school and extra-curricular activities. The Ward 5 resident still manages to travel and spend quality time with her family, which are very important to her. She also enjoys planting and doing yard work.

“I enjoy watching things grow and knowing that I had a hand in their development,” Cheryl tells us.

The same also could be said about her work at OPC. Cheryl has had her hands in a lot at the Office of the People’s Counsel. With the Cafritz Award nomination, it’s good to know that her handiwork has blossomed into well-deserved recognition.

Do you sometimes find yourself screaming at your computer because getting to a website is “as slow as molasses?”

Well, some consumer advocates say you might now be in store for even more molasses as the Federal Communications Commission (FCC) has voted to repeal Net Neutrality rules.

OPC, along with numerous consumer advocacy groups and members of the National Association of State Utility Consumer Advocates, supported the FCC's formal action in 2015 to classify broadband internet service as a public utility service. The FCC's action enacted rules to protect what is known as Net Neutrality.

Public Knowledge, a consumer advocacy organization, describes Net Neutrality as “the basic principle that prohibits internet service providers like AT&T, Comcast and Verizon from slowing down, speeding up or blocking any content, applications or websites you want to use.”

That access is now in jeopardy as the FCC voted to repeal the 2015 Net Neutrality rules on December 14.

According to a press release from the FCC, the Commission said its reversal action followed “detailed legal and economic analysis, as well as extensive examination of comments from consumers and stakeholders.” Critics of Net Neutrality say the move will restore the framework under which the internet grew and thrived, and the internet economy blossomed with streaming music, video and social media.

OPC and other consumer advocates believe the FCC’s action could stifle those who use the internet to search for job and educational opportunities, particularly underserved populations, and organize social action. In addition, opponents of the FCC’s action believe it could lead to higher prices for some companies, and ultimately for consumers, to use the internet.

While the rules are set to take effect in several weeks, many state attorneys general have vowed to formally challenge the FCC’s rules in court. Some also are pushing for congressional legislation to reverse the FCC’s action. OPC nor the DC Public Service Commission have any regulatory authority to assist consumers with broadband internet service complaints. We are closely watching, though, to see if the future of the internet holds more “molasses.”

Advocating for tangible and direct benefits for consumers, staff from OPC’s Litigation Services Division with the People’s Counsel participate in the WGL- AltaGas merger hearings before the DC Public Service Commission

OPC is continuing to advocate on behalf of consumers as the DC Public Service Commission is considering the merger application of WGL Holdings, Inc., the parent company of Washington Gas, and AltaGas Ltd, a utility company based in Canada. On December 5, the Commission began seven days of evidentiary hearings on the proposed merger. OPC has presented witnesses and testimony urging the PSC to reject the proposal for a number of reasons. For example,OPC’s legal team noted that the companies only offer consumers a bare “benefits” package, valued at a small fraction of the $4.5 billion deal; and their proposed merger commitments to ratepayers, the District’s economy and the environment fall woefully short. OPC also expressed major concerns about AltaGas’s financial status, which is weaker than that of Washington Gas and could increase costs to DC ratepayers.

District law is clear on the benefits that must flow to consumers in the consideration of a merger. The AltaGas-WGL application does not appear to satisfy these standards. In light of these and many other issues, the People’s Counsel urges the Commission to reject the application for failure to satisfy established public interest criteria.

OPC encourages members of the public to give input on the merger application, classified as Formal Case No. 1142. The Public Service Commission is taking written comments until January 30, 2018. Individuals and community groups can contact OPC if you need technical assistance with comments.

OPC is advocating for consumers in the following cases before the PSC:

RM27-2017-01-21 – In the Matter of the Commission’s Investigation into the Rules Governing Local Exchange Carrier Quality of Service Standards for the District

On November 1 OPC Filed Reply Comments in response to Notice of Second Proposed Rulemaking.

PEPACR2016-01-E-14 & PEPACR2015-01-17 - In the Matter of the Commission Fuel Adjustment Clause Audit and Review Program-Annual Consolidated Report

On November 20, OPC Filed Initial Comments on Equipment Condition Assessment Team Minutes Pursuant to Order No. 19119.

Formal Case No. 1144 - In the Matter of the Application of the Potomac Electric Power Company's Notice to Construct Two 230kV Underground Circuits from the Takoma Substation to the Rebuilt Harvard Substation and from the Rebuilt Harvard Substation to the Rebuilt Champlain Substation (Capital Grid Project)

On November 29, OPC Filed Comments to Pepco’s Formal Notice of Construction of the Capital Grid Project.

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OPC will be out at the following events:

Energy Efficiency Workshop
Brown Elementary School
850 26 th St. NE
4 pm

Energy Efficiency Workshop
Wheatley Elementary School
1299 Neal St. NE
3:30 pm

Energy Efficiency Workshop
The Spring Valley Wesley Heights Citizens Association
4430 Newark St. NW
7:30 pm

Energy Efficiency Workshop
Friends of Kingman Park
7:00 pm

Ward 8 Democrats Monthly Meeting
RISE Demonstration Center on the East Campus of St. Elizabeths,
2730 Martin Luther King, Jr. Avenue, SE
12-2 pm