Credit: Bethesda Beat file photo

The state commission that regulates the power utility Pepco has approved a settlement agreement that will lower Pepco’s electricity distribution rates by $15 million.

The move by the Maryland Public Service Commission (PSC) means the average Pepco residential customer will see their electric bills drop by about $1.64 per month. Residential customers will also receive a one-time credit of $10.09.

The lower rates will go into effect Friday.

The drop in electric rates comes after Congress voted to cut corporate tax rates from 35 percent to 21 percent late last year. The tax cut generated significant tax savings for Pepco that it is required to return to ratepayers. For example, the funds for the one-time credit come from the $9.7 million Pepco saved in tax payments from Jan. 1 through May 31.

In January, Pepco requested the commission approve a $41 million rate increase, but revised the request in May to instead ask for a rate reduction after being challenged by Montgomery County, the city of Gaithersburg and others in filings with the PSC.

In the previous two years, the commission approved Pepco rate increases of $52.5 million and $33.9 million respectively after the utility requested more money to upgrade power lines and trim trees and for other infrastructure improvements.


Pepco provides power to about 566,000 customers in Montgomery and Prince George’s counties.

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