Pepco customers in Maryland will see their bills go up starting in April, according to the utility company. The company says on its website that the typical electric bill will rise by about $2.51 per month, though “individual customer bill increases may differ from these amounts, depending on household energy use.”

The price changes will affect about 600,000 customers in Montgomery and Prince George’s counties who get their power through Pepco. Pepco spokesperson Ben Armstrong tells DCist/WAMU that customers’ bill increases will depend on their energy use. Customers who use more than the average residential electric consumer — which they say uses 811 kilowatt hours of power per month — will have a larger increase in their monthly bill, while customers who use less than the average consumer will have a smaller increase.

Pepco says it is increasing its prices to fund improvements to the energy grid. The rate increases were approved in 2021, but the first two bill increases — which went into effect in June 2021 and April 2022 — were largely offset by tax benefits adopted through an agreement with Maryland’s Public Service Commission. The increases that go into effect in April will no longer be offset by those tax benefits, so customers will see the full increase on their monthly bills.

Customers who are having difficulty with bill increases can call 202-833-7500 or visit pepco.com/EnergyAssistance to learn about payment assistance and payment plans.

The rate increases are occurring as part of what the company calls its “multi-year plan,” where it approaches local Public Service Commissions and asks them to improve potential rate increases to fund improvements to the electric system and support the increasing costs of delivering energy. Armstrong, with Pepco, explained that in the past, utilities tended to spend money on improvements and then petition local public service commissions after the fact to try and recoup those costs. Now, Pepco makes those asks up front so they know what projects they can fund.

Pepco anticipates that the work to modernize its grid and replace aging infrastructure will last through 2024. The hope is that the work will help the system avoid preventable power outages and withstand the kinds of extreme weather events that climate change is making more frequent. In recent years, the company has touted its maintenance efforts, which it says has led to less frequent power outages.

While the company has framed the rate increases as necessary for reliable power, Maryland’s Office of the People’s Counsel – which advocates for utility customers – has pushed back against the company’s efforts to raise rates. In 2020, People’s Counsel David Lapp told MoCo360 that he wanted to see the state’s Public Service Commission approve a smaller rate increase for Pepco, arguing that the utility company could have found lower-cost ways of improving its grid.

“The reality is that without sort of keeping a close eye on it … the utility will make investments that are beneficial to shareholders and its bottom line as opposed to what is best for the consumers and environment,” Lapp said at the time.

In an interview with DCist/WAMU on Monday, Lapp said that multi-year plans are “not good for consumers,” because they essentially provide utilities with a blank check. Now, instead of having to justify rate increases by showing new substations or other completed improvements, utilities like Pepco can now ask for money up front and then spend it how they choose later, he says. And it becomes more difficult for consumer advocates and public service commissions to make sure the money is well-spent.

“Once that money is spent … it becomes very hard to pull that money back,” says Lapp. Lapp also added that the average customer will likely see a monthly bill increase higher than $2.50 as the region heads into the summer months, because people who use air conditioning tend to consume more power during the hotter months.

There’s also been tension between Pepco and consumer advocates in neighboring D.C. In November, the D.C. Court of Appeals sided with the city’s Office of the People’s Counsel in a challenge over a Pepco rate increase. The OPC argued that the city’s Public Service Commission should not have allowed Pepco to charge customers more in order to pay for cleanups of pollution in the Anacostia River and at Pepco’s Benning Road station — and the appeals court ultimately sent the plan back to the Commission for further consideration.

While the rate increases going into effect in April will only affect Maryland customers, there could potentially be rate hikes on the horizon in the District: Doxie McCoy, the public information officer for D.C.’s Office of the People’s Counsel, said Monday that they are expecting Pepco to file a new application for a rate increase sometime next month.

Armstrong, with Pepco, also confirmed that the company will be filing a new multi-year plan with D.C.’s Public Service Commission soon, laying out plans for investing in improvements to the electric system and clean energy.

This story has been updated with comments from Maryland’s People’s Counsel and to clarify the decision of the D.C. Court of Appeals.