For Immediate Release
Innovative Project to Improve Electric Service Reliability by 95 Percent on Targeted Lines
(WASHINGTON, D.C.) - Pepco and the District Department of Transportation (DDOT) today filed with the District of Columbia Public Service Commission an application for approval of their triennial plan for the District of Columbia Power Line Undergrounding (DC PLUG) initiative.
The unique public-private partnership to bury overhead primary power lines to dramatically improve electric service reliability during all weather conditions was signed into law in May. The $1 billion project is the culmination of the work of the Mayor's Power Line Undergrounding Task Force, established after a series of severe weather events in 2012 caused widespread outages and left extensive wind damage across the region.
The triennial plan, which covers 2015-2017, calls for DDOT to construct the necessary underground facilities and for Pepco to install the electric distribution system improvements for the feeders slated for work during for the first three years. Construction will begin by the spring of 2015. The commission must first conduct a proceeding to consider the plan and the related financing arrangements, and the District must complete its bond issuances to secure funding for the DDOT portion of the work.
"This initial filing moves us that much closer to improving electric reliability in the District, particularly for communities hardest hit during severe storms," said City Administrator Allen Y. Lew. "From improving the electric grid across the District, to resolving flooding issues in mid-city neighborhoods, the Gray administration has committed unparalleled resources toward improving service reliability. I look forward to working closely with the Public Service Commission, the Office of People's Counsel, Pepco, DDOT and other stakeholders to get the undergrounding project started as quickly as possible."
The areas identified in the triennial plan will include the high-voltage feeders most affected by outages that occurred on the overhead electric system primarily within Wards 3, 4, 5, 7 and 8. About half of the District is already served by underground lines. Secondary and service lines will remain overhead on the existing poles.
"We are exceeding service reliability standards in the District, and our customers are seeing dramatic improvements in the frequency and duration of outages because of the reliability work we are performing," said Donna Cooper, Pepco region president. "But the extreme weather events we are now seeing can devastate any overhead system. This will help protect against severe storm damage and prolonged outages, which will benefit everyone in the District, and also will complement our reliability improvement work."
DC PLUG will also contribute to the economy of the District of Columbia by stimulating economic growth through job creation. One important aspect of the DC PLUG initiative is an effort to hire District of Columbia residents and contractors for the initiative.
Criteria for selection of the feeders for the first three years included a combination of historical feeder performance, other reliability enhancement work, safety, value of service and community impact.
The DC PLUG initiative will be financed through a combination of Pepco investment ($500 million), funding from the District through DDOT Capital Improvement funds ($62 million) and funds from District issued bonds ($375 million). DC PLUG initiative costs will be recovered through two surcharges on customer bills. The Pepco investment will be recovered through the "Underground Charge, Pepco" and will initially have a rate impact of $.18 or 0.18% per month for the typical residential customer in 2015.
The financing application, expected to be filed Aug. 1, will request approval of the second surcharge that will cover the debt service on the bonds to be issued by the District to fund its portion of the work. Low-income customers receiving the Residential Aid Discount will be exempt from the rate impact.
The triennial plan also outlines an education and communications plan to help residents, businesses and other stakeholders understand the scope of the initiative and expected impact, planned activities for the target areas, the infrastructure improvement process and the schedule.
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Pepco, a subsidiary of Pepco Holdings, Inc. (NYSE: POM), delivers safe, reliable and affordable electric service to more than 800,000 customers in Maryland and the District of Columbia.
The District Department of Transportation (DDOT) is committed to achieving an exceptional quality of life in the nation's capital through more sustainable travel practices, safer streets and outstanding access to goods and services. Central to this vision is improving energy efficiency and modern mobility by providing next generation alternatives to single occupancy driving in the city.