Potomac-area Pepco customers will pay about $3.94 more per month on their electric bills, not the $10.24 the utility wanted.

The Maryland Public Service Commission (PSC) on Friday, Aug. 28, approved a $50.9 million revenue increase for Pepco. That is less than half the $119.8 million the utility had requested. The new rates took effect the same day.

For Montgomery County households, the increase works out to about 2.25% on an average residential bill, according to Maryland Matters. Prince George's County customers will see a similar 2.23% increase.

The PSC made two significant cuts to Pepco's request. Regulators found that Pepco's capital spending on the White Flint infrastructure projects was not prudent and disallowed those costs. The commission also rejected Pepco's request to build projected inflation, labor and capital spending increases into the rate base.

The White Flint disallowance totaled approximately $164.9 million, according to Microgrid Media. The Office of People's Counsel, the Maryland Energy Administration and the Apartment and Office Building Association had all argued the spending had not been shown to be prudent.

"Plain and simple, utilities should not earn unreasonable profits while everyday Marylanders can't afford to pay their power bills," Gov. Wes Moore said in an Aug. 28 statement.

Moore called the ruling a win in his administration's effort to hold utilities accountable. His administration signed the Utility RELIEF Act in May, which the governor's office says mobilizes nearly $300 million in energy relief for Maryland families.

Maryland Energy Administration Director Kelly Speakes-Backman said in the governor's statement that the White Flint disallowance sends a message that imprudent utility spending will not be tolerated.

PSC Chair Kumar Barve said the order resulted from an extensive review of financial data and testimony from Pepco, commission staff, the Office of People's Counsel and other stakeholders. The commission set Pepco's return on equity at 9.40%, below the utility's existing 9.50% and well below the 10.5% Pepco had sought.

Valencia McClure, Pepco's senior vice president of government, regulatory and external affairs, said the company agrees affordability is important for Maryland customers. She said Pepco's role is to propose investments that best position the electric system to meet customer needs.

Pepco serves about 610,000 customers across Montgomery and Prince George's counties. The company originally applied for a $133 million revenue increase in October 2025 before revising the request downward during the proceeding.

The PSC said it will open a Phase II proceeding to determine whether additional costs should be removed from rates under the Utility RELIEF Act. No date for that proceeding has been announced.