Testimony of Robert Robinson, Chair, DC Consumer Utility Board before the Committee on Business, Consumer & Regulatory Affairs

Vincent Orange, Chair
July 13, 2016, 2:00 p.m.

My name is Robert Robinson, I chair the DC Consumer Utility Board, an organization founded in 1978 that had been inactive for a number of years, but is now reorganized; and I was an intervenor in Formal Case No. 1119 — the proposed Pepco-Exelon merger.

The CUB’s mission to educate and inform residents and ratepayers about the performance of its utilities and regulatory bodies and to organize and mobilize consumers to assure their voices are heard and their needs met.  

I would like to express my particular thanks to some of the members of the Council and to the Joint Applicants, but I would like to make some observations on the need for a significant reform first.

The DC Public Service Commission utterly failed to manage this process in the public interest.

Here’s why: in approving this merger (after twice finding that the Joint Applicants had failed to prove the transaction was in the public interest), the two members of the Commission who voted to approve it nowhere demonstrated how their revised settlement agreement offset the risks and harms detailed in the PSC staff’s excellently presented Findings of Fact and Conclusions in Order No. 17947.

Nor did they indicate how that settlement would prevent Exelon, once it owned PHI, from using its ownership and control of the new corporate structure to maximize their profits and block the ratepayers from receiving the benefits of competition. 

We need the Council’s help in crafting and enacting a fully articulated, statutory merger policy and reforms to make the regulatory processes serve the interests of ratepayers. Even the process by which the Executive conducts its search for nominees to the Public Service Commission lacks transparency. And, the Council’s recent practices in vetting those nominees is to excludes the public from participation its hearings. 

Now that Pepco/Exelon has announced its first $85.5 million rate hike, how can we be sure that we do not wind up paying some or all of the hundreds of millions spent on this deal? There is no requirement for the Joint Applicants to account to the PSC for their spending on the merger in the first place. How likely is it the PSC will be able to put that together after the fact?

The Council members won’t be able to ignore the impact of all this on DCs tax and ratepayers. Electric and Water utilities’ costs are increasing at twice and three times the rate of cost-of-living increases. DC Water assesses 10% late fees on their bills and places liens on homes and property for arrearages. We paid and keep paying for SmartMeters but keep doing estimated billing. The promised services to ratepayers never materialized.

Key services, such as broadband are largely unaffordable for families with children. And while DC spent millions to make it available to families in Wards 7 & 8 — the city reneged on that promise. 

Additionally, utility bills are packed with “surcharges” and other fees — if you look at your water bill for example, you may pay $20 for water services on any given month, but there will be another $100 in surcharges. 

And, let’s be clear, surcharges of this type are the most regressive form of tax there is, because it requires those with the least income to pay a far larger proportion of their meager finances for basic necessities of life. The District government seems to be shifting its own risk for financing infrastructure programs onto ratepayers.

DC government is going after the wealth families have accrued in their homes, with astronomical property assessment increases. Now they’ve sent a message to the utilities that the ratepayers are fair game for them, too. Is arbitraging the tax base DC’s newest budget policy?

But I must express my sincere thanks to this committee and some members of the Council and the Executive: because of the egregious conflicts of interest by those promoting this merger and because residents’ backs are up against the wall so hard, we have three new members of the Council. And another election is quickly approaching. 

And to Exelon and Pepco, whose strategy to "buy" this merger is paying off at last: congratulations, a new concept is uppermost on the public mind and lips --   municipalization. 

Likewise, more and more ratepayers are clamoring for access to locally-produced Renewables and Energy Efficiency, and a grid built around distributed generation. 

Thank you very much.

Robert Robinson