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Posted at 5:38 PM ET, 02/ 7/2011

Pepco execs criticized at MoCo hearing

By Michael Laris

Pepco executives were sharply criticized by the Montgomery County Council Monday during a far-reaching post-thundersnow scolding that at times took on the demeanor of a prosecution.

Council members accused Pepco of lavishing its shareholders with dividends while spending too little on maintenance.

Pepco’s vast outages after the recent storm show how the basic agreement between the firm and the public has crumbled, said Council member Roger Berliner, himself an energy lawyer.

“While Pepco has its monopoly and its shareholders have earned what I believe to be an inappropriate return, our residents have not gotten their end of the bargain -– reliable service and effective regulatory oversight,” Berliner said.

“Instead, we have a public utility that allowed its system to degrade over many years to the point where the service, on sunny days, is the worst in the state, worst in the region, and has been in the lowest quartile in the nation for years,” Berliner said.

Company representatives, lined up at a table before the council dais, repeatedly said they are making progress on a multi-year plan to improve the utility’s reliability.

Pepco officials said dividend figures cited by council staff -- about $1.5 more than $1 billion over five years, according to council research –- were far too expansive, because they included other parts of Pepco’s broader holding company. Moreover, they said, paying dividends helps attract the investors who help fund needed improvements.

By Michael Laris  | February 7, 2011; 5:38 PM ET
 
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