31st Underground Explosion in PEPCO's Distribution System Means the Public Service Commission Must Act Now to Require PEPCO To Fix Its Aged Underground Distribution System Before Innocent Bystanders Are Hurt Or Worse!!

Office of the People's Counsel for the District of Columbia

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PRESS RELEASE

Elizabeth A. Noël, People's Counsel

CONTACT:

PHIL HARMON

(202) 727-3071

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May 15, 2001

31st Underground Explosion in PEPCO's Distribution System

Means the Public Service Commission Must Act Now to Require PEPCO To Fix Its Aged

Underground Distribution System Before Innocent Bystanders Are Hurt Or Worse!!

"31 Underground eruptions" are way too many to dismiss as "business as usual." Common sense suggests that there is a serious problem in PEPCO's Distribution system under D.C. streets and that PEPCO is either unwilling or unable to fix it at this time. District of Columbia citizens and ratepayers deserve, and indeed have paid for, a reliable and safe electric distribution system, stated D.C. People's Counsel Elizabeth A. Noël. "Even under 'deregulation' and retail competition, the PSC retains the authority to regulate PEPCO's transmission and distribution system. The PSC has the authority to cause PEPCO to act now! The PSC must use the full breadth of its authority to protect the interests of D.C. ratepayers and citizens in safe, adequate and reliable electric service." The PSC must tell PEPCO to fix this problem-- and fast!"

On May 4, 2000 (as a follow up to its November 2000 filing) the People's Counsel filed a Petition before the Public Service Commission (the regulatory agency with exclusive and plenary jurisdiction over the reliability of PEPCO's distribution system) urging the Commission to immediately require PEPCO to make all necessary corrections to its distribution system before it is allowed to award the net proceeds of the sale of its five generating plants to its shareholders. If not, then D.C. consumers and citizens will be left Aholding the bag! The PSC has not yet acted on the People's Counsel Petition.

"We can no longer avoid the fact that if PEPCO is allowed to delay repairs to its distribution system, then eventually someone will get hurt or much, much worse" stated People's Counsel Elizabeth A. Noël. A This approach to 'regulating' PEPCO's system is not in the public interest!"

The People's Counsel said that this situation is "evidence of a clash of interests. On the one hand is PEPCO's interest in preserving for its own shareholders the financial bounty of the recent sale of its generation plants (before it has to fix the system.) On the other hand is the D.C. ratepayers and citizens' interest in ensuring that sufficient monies are set aside (before the money is awarded to shareholders) to fix an old, antiquated system. and before someone is seriously injured. This is an old dichotomy with serious implications for the safety and well-being of D.C. citizens and consumers. If an appropriate balance is not struck by the PSC, then D.C. ratepayers and citizens will be left holding the bag for the full costs of repairing PEPCO's old, antiquated distribution system. This is not fair," said Ms. Noël.

In OPC's Petition still pending before the PSC, OPC has again urged the Commission to convene a public hearing in order to create a public record concerning these "underground eruptions, fires, explosions and disturbances" in PEPCO's underground distribution system. Also the PSC should direct PEPCO to file written reports on all incidents involving its underground distribution system, "and not just reports on those incidents which it chooses to report" stated Ms. Noël. Most importantly, the People's Counsel has reiterated her request that the PSC reject PEPCO's request to allocate the proceeds of the divestiture until monies are set aside to fix the system, and PEPCO provides evidence that the system is safe. The People's Counsel suggests the Commission's failure to take immediate action to use its plenary authority to regulate PEPCO concerning the reliability and safety of its distribution system is not in the public interest.

As stated in the OPC petition last year, "The Office submits that D.C. ratepayers are entitled to assurance from this Commission that, after the smoke clears, that D.C. ratepayers are not left "holding the bag" for the financial responsibility of rehabilitating an aging distribution system that was not properly maintained or upgraded by PEPCO."

"Months have passed, and these underground explosions persist. It is high time for the Public Service Commission to use the breadth of its statutory authority to force PEPCO to fix this problem now and to put PEPCO on notice that their shareholders will not be permitted to receive the bounty of divestiture leaving D.C. ratepayers and citizens to duck exploding manhole covers and worse!" said the People's Counsel.

The Office of the People’s Counsel is an independent agency of the District of Columbia

government that represents consumers of energy and telecommunications services.