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Montgomery County: Pepco Rates Should Be Cut, Not Increased

By WTOP Staff

Pepco pole, via Abigail ReidPepco is seeking a $37 million rate increase, but Montgomery County says the power company’s rates should actually be cut by $1.5 million.

The county this week filed its official opposition to Pepco’s latest rate increase request, this time for $37.4 million that would mean an almost 3 percent increase for the typical residential customer.

Assistant County Attorney Lisa Brennan concluded that Pepco has a revenue surplus and isn’t in need of a rate increase to pay off expenses for improving the system. Rate increase requests are common for natural monopoly utilities seeking to recover large costs. It’s Pepco’s third rate increase request in two years.

“Pepco has failed to meet its burden of proof to support its request for a $37.4 million increase in rates,” Brennan wrote in the memo to the Public Service Commission.

Pepco’s original request, filed in December, was for a $43 million rate increase. The county has also said the PSC should set Pepco’s Rate of Return to 7.31 percent. Pepco has asked for an increase in that number to 7.92 percent.

“While I believe that Pepco has improved its reliability since the Derecho of 2012, largely in keeping with recommendations made in a 192-page report by my Pepco Reliability Work Group earlier, I believe that Pepco’s latest rate request is still too high,” County Executive Isiah Leggett said in a press release.

During the recent hearings on the request in front of the PSC, Montgomery County initially recommended a $14.3 million rate increase for Pepco. That changed in May.

The county memo describes a complicated legal process in which county attorneys claim Pepco misrepresented certain expenses. The county also claims it wasn’t allowed to cross examine Pepco officials after the company provided updated information on expenses.

The memo goes on to say that part of the $1.9 million Pepco spent in 2012 to hire consultants from Accenture shouldn’t be included in recoverable expenses in this rate case. Pepco claimed those consultants helped Pepco Holdings Inc. (which includes electric utilities in New Jersey and Delaware) save more than $7 million.

First, it was not necessary for Pepco to pay Accenture close to $2.0 million to produce these claimed savings, because most of the savings are common sense and typical prudent decisions that most companies make on a day-to-day basis, some of the cost savings are merely a recommendation to defer spending another year, and Pepco should have had the in-house expertise to make these sorts of routine decisions without the need to hire an outside consulting firm.

The Public Service Commission is expected to make its ruling later this year.

In its press release, Montgomery County said its opposition last year helped stave off $50 million in two Pepco increase requests.

The county also opposes Pepco’s proposed “true-up mechanism,” which would send money back to the ratepayers if the actual costs of certain improvements end up being less than the estimates.

Photo via Abigail Reid

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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