Washington, DC--Pepco today announced proposed new rates for its District of Columbia Standard Offer Service (SOS) customers that will go into effect for one year beginning June 1, 2006. The new rates, based on a competitive bidding process, will raise the average monthly electric bill for DC residential customers by about 12 percent, or $8.33; residential bills will rise from an average of $69.21 today to an average of $77.53 once the June 1 price increases are fully reflected in customer bills. The new rates must still be approved formally by the District of Columbia Public Service Commission (DC PSC).

The increase reflects bid prices received by Pepco for wholesale power to supply retail customers in the District of Columbia who do not buy their electricity from an alternative supplier (SOS customers). The competitive bid process was conducted under rules issued by the DC PSC, which also oversaw the bidding and issued their own announcement of the proposed new rates today.

The increases are lower than those seen in neighboring jurisdictions because-thanks to the  DC PSC's procurement plan for residential customers-only about one-third of the total supply requirement was up for bid this year. Under this bidding plan, there are multiple rolling contracts, which moderates the extent of price changes in any one year.     

 "Our goal in the procurement process is to secure the lowest prices we can for our customers," says Tom Graham, President of Pepco Holdings, Inc.'s Pepco region. "And while the substantial increases in the price of fuels that go into generating electricity made rate increases unavoidable, the DC PSC's rolling contract structure under which smaller portions of the customer load are bid out each year has helped to keep the increases more manageable." 

Between 1999 and 2005, natural gas prices rose a total of 400 percent; fuel oil prices rose 300 percent; and coal prices rose 150 percent. In just one year, 2005, the price of fuel oil rose 76 percent and of natural gas, 67 percent¹. 

"We can't do anything to change the costs of energy commodities," Graham continues. "What we can do is educate our customers as to how they can significantly reduce their consumption of electricity, thereby minimizing the impact of higher rates." Customers can keep their bills down by taking some simple conservation steps, many of which are low-cost or no-cost.

"Helping customers manage their bills is also a priority," says Graham. "This includes encouraging customers to take advantage of 'Budget Billing,' whereby they can spread their bills evenly over the year, avoiding the jumps that come with higher usage in summer and winter." Pepco will also continue to actively help low-income customers enroll in the several energy bill payment assistance programs run by both the District Government and by Pepco, while continuing to support the efforts of the many advocacy organizations that provide valuable guidance and support to low-income customers.  

Graham urges customers to visit www.pepco.com for information on energy conservation, low-income customer assistance programs and more information on rates. Customers can also call 202-833-7500 for information and assistance with registering for Budget Billing or energy assistance programs and to request any of Pepco's brochures, including "85 Ways to Save Money and Energy." Spanish-speaking customer service representatives are always available to assist Pepco's Spanish-speaking customers. 

"Our Speakers Bureau can also provide knowledgeable Pepco employees to visit community associations or any other venue where DC residents gather to exchange information," says Graham. "We are geared up to make presentations on the new rates and on energy conservation, and are prepared to tailor the presentations and answer questions on whatever topic is requested by the local customer groups."

To schedule a Pepco Speakers Bureau presentation, customers should call 202-872-2089.

Pepco's commercial customers can find the new commercial rates that will go into effect on June 1 by visiting www.pepco.com.  (Click on Your Business, and then Choices and Rates.)

In the coming weeks, Pepco will send to all 235,000 of Pepco's District of Columbia residential and commercial customers detailed individual notification of the new rates that will affect their account.   
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1 U.S. DOE/Energy Information Agency; U.S. DOL/Bureau of Labor Statistics

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Pepco, a subsidiary of Pepco Holdings, Inc. (NYSE: POM), delivers safe, reliable and affordable electric service to more than 745,000 customers in Maryland and the District of Columbia.