News & Events

AOBA testified before the DC Council on Monday, June 29, about the impact of rising electric costs on District residents, housing providers, businesses, and the broader economy. Speaking for AOBA members, Kevin Carey & Frann Francis, stressed that one key driver within the District’s control is how Pepco’s distribution rates are set.

Why it matters: Pepco’s current multi-year rate plan shifts too much risk from the utility to customers, reduces transparency, increases the cost and complexity of rate cases, and relies heavily on forecasts instead of actual, verifiable costs.

AOBA Actions: AOBA urged the Council to restore a more balanced, evidence-based approach to ratemaking by:

• Sunsetting or significantly limiting multi-year rate plans
• Returning to historic test-year ratemaking based on actual costs
• Requiring stronger cost-benefit and prudence reviews for major utility investments
• Prohibiting customer surcharges tied to the reconciliation of cost or revenue variances

AOBA also called on the Council to support ratepayer relief in the Formal Case No. 1176 remand proceeding by urging the Public Service Commission to:

• Hold a full evidentiary hearing
• Restore rates to pre-January 1, 2025, levels until the Commission issues a lawful new rate order

Finally, AOBA recommended slowing future increases in the District’s Renewable Portfolio Standard requirements to ease pressure on electric supply costs while still advancing long-term decarbonization goals.

The bottom line: AOBA’s message to the Council is clear: electric rates must be more affordable, transparent, and accountable for all District ratepayers. Watch the team’s full testimonies below. 

What’s next: AOBA will keep members informed on Council actions and Commission proceedings and can help assess potential bill impacts for your properties. 

For customers who are purchasing their electric supply from Pepco under Standard Offer Service, the new SOS rates will go into effect July 1, 2026. This is a change from all other years when SOS rates are updated June 1st. Pepco requested a one-month delay in the application of the rates to ensure that the new rates are accurately updated in their system. Note that the SOS prices will be in effect from July 1, 2026 -May 31, 2027. For the month lag, Pepco will accrue the lost revenue from the lower rates in June and adjust the SOS rate through the Procurement Cost Adjustment (“PCA”), which is filed annually by Pepco. The PCA is a true-up mechanism for the cost to provide SOS service to customers. Pepco reserves the right to adjust SOS rates throughout the year through the PCA and Administrative Charge mechanisms.

Estimates for the all-in cost for SOS supply are in the $0.17 per kwh range representing the highest SOS rates for Pepco DC which is driven by increased capacity costs, increased Renewable Portfolio Standard costs and wholesale energy price escalation.

Participants who are interested in evaluating moving off SOS service and into a competitive supply agreement through AOBA Alliance can contact Kevin Carey @ kcarey@aoba-metro.org.

On April 8, 2026, AOBA Alliance and Constellation updated Alliance participants on the current energy market, including PJM capacity rates as well as updates on current utility rate case proceedings. The materials are shared here.

https://aobaalliance.com/wp-content/uploads/2026/04/2026-04-08-2026-Utility-Committee-Presentation.pptx

https://aobaalliance.com/wp-content/uploads/2026/04/AOBA-Market-Update-4-8-26.pdf

On January 30, 2026, Pepco filed its updated BSA surcharge to be billed effective March 1, 2026. This will be a line item on the Pepco bill listed as BSA I. This charge is to collect or refund each rate class based on the DC PSC approved class revenue requirement in the last Pepco rate case (i.e., Formal Case No. 1176) and actual revenue collected for the period of January 1, – December 31, 2025.

For example, the MGTLV class authorized revenue was $203,988,277.70 and the billed revenue was $207,333,245.57. That over-collected revenue of $3,344,967.57 will be credited to MGTLV accounts in 2026.

Additionally, the legacy BSA charges/refunds from prior balances as of December 31, 2024, also from Pepco Formal Case No. 1176, are to be collected/refunded through BSA II.  These legacy balances are calculated and will be collected through the BSA II charge on your bill.  This impacts mostly the GTLV rate class.

The GTLV rate class had a large under-billed revenue total at the end of 2024 and this balance will be collected through the BSA II charge.  For the GTLV rate class, below is the calculation.  There is an annual cap of 10% of revenues to be collected through the BSA which limits the annual BSA collections.

The result of these collections are the line item charges shown below. The “net” BSA charge is shown in the last column which combined the two BSA I and II line items and shows a comparison to what was billed in 2025 for BSA and what will be billed in 2026.

Pepco filed a request for a rate increase in Maryland on October 14, 2025. Pepco’s request actually consists of two different rate applications, one based on an historical test year for $142 million increase, and the other based on a fully forecasted test year for $133 million increase.

Work on this case has begun since the first hearing date is scheduled for November 18, 2025. In preparation for that hearing, AOBA has filed a Motion to Dismiss/Reject Pepco’s Application or portions thereof. Pepco proposes that new rates become effective April 10, 2026.

However, it is unlikely that rates will increase before August 10, 2026. AOBA is reviewing this complex filing, but preliminary estimates anticipate rate increases for commercial customers between 23% – 29%, if not more.

AOBA and AOBA Alliance will be hosting a Utility Briefing and Energy Market Update on Wednesday November 19, 2025 at 11 AM where we will discuss the latest Pepco MD rate increase filing and other pending rate cases in MD, DC and VA. Additionally, Constellation will provide an update on energy markets.