Earnings were down in the second quarter and first half at Delmarva Power owner Pepco Holdings.
The Washington, D.C.-based company reported net income for the quarter of $62 million, compared to $95 million a year earlier. First half net income was $130 million, down from $157 a year earlier.
Higher revenues from rate increases were offset by a number of factors including employee and customer services costs, as well as income tax adjustments and unfavorable rate increase cases in Maryland.
“Our second quarter financial results were in line with our expectations and we continue to make good progress on executing our strategic plan,” said Joseph M. Rigby, CEO. “However, we recently received decisions in our Pepco and Delmarva Power distribution base rate cases in Maryland and found those to be disappointing. The commission rejected our proposals aimed at timely cost recovery and authorized a return on equity for Pepco that is among the lowest in the country. We expect to file our next round of rate cases in Maryland in the fourth quarter of this year. A fair and reasonable outcome in the next round of cases will be crucial to continue the pace of investment in Maryland,” Rigby said. He added that the company continues a hiring freeze in Maryland, but continues to emphasize system reliability.
Rigby said the company performed well in dealing with a late June storm that at one point led to outages affecting 38 percent of its customers. Costs of power restoration will, for the most part, show up in the third quarter.
An estimate indicates storm clean-up efforts will cost $70 million to $85 million.
Pepco serves areas around Washington, D.C. A large portion of Delaware, the Eastern Shore of Maryland and the Atlantic City, N.J.area. All were affected by the storm.
