Pepco's $123M Rate Hike Thrown Out: What DC Homeowners Need to Know
The DC Court of Appeals just struck down Pepco's $123.4 million rate increase — and DC homeowners may be in line for refunds. Here's what happened, what it means for your electric bill, and how to protect yourself from the next rate hike.
Table of Contents
- What Happened With the Pepco Rate Hike
- How Much Did Pepco Rates Increase?
- Will DC Residents Get Refunds?
- What Is the DC Public Service Commission?
- Timeline of Events
- What Should DC Homeowners Do Now
- Why This Keeps Happening — And How Solar Stops the Cycle
- FAQ
What Happened With the Pepco Rate Hike
On March 6, 2026, the DC Court of Appeals vacated ↗ the Public Service Commission's approval of Pepco's multi-year rate increase. The court found that the PSC failed to hold a required evidentiary hearing before approving the hike.
In plain English: Pepco asked to raise your rates by $123.4 million. The regulators approved it without properly examining whether those increases were justified. A court said that's not okay.
The ruling came after the Office of the People's Counsel (OPC) ↗ and the Apartment and Office Building Association (AOBA) challenged the approval in March 2025, arguing the PSC skipped due process.
Associate Judge Joshua Deahl didn't mince words about the PSC's reasoning. When describing the conflicting calculations between Pepco and AOBA, he wrote: "If you find that difficult to decipher, join the club!"
The case has been sent back to the PSC for a proper trial-type evidentiary hearing with cross-examination and expert witnesses — something that should have happened the first time.
How Much Did Pepco Rates Increase?
Pepco's approved rate increase totaled $123.4 million annually in delivery charges. This was a multi-year plan covering 2024 through 2026, meaning rates were set to increase year over year based on Pepco's projected future costs — not historical, proven expenses.
The real-world impact hit hard this winter:
- Ward 4 Councilmember Janeese Lewis George reported a $899 Pepco bill
- At-Large Councilmember Robert White received a $1,100 bill
- 2,000 more DC households fell into utility debt between December and January alone, according to We Power DC ↗
The $123.4M rate hike came on top of a previous $108 million increase approved in 2019. OPC and analysts alleged those earlier funds were misspent — and Pepco still hadn't been held accountable when it asked for more.
One critical detail: AOBA's calculations differed from Pepco's by $49 million. The PSC approved Pepco's numbers without explaining why. Even PSC Commissioner Richard Beverly called the approval process a "regulatory trainwreck" in his dissenting opinion.
Will DC Residents Get Refunds?
Maybe — but not immediately.
OPC and AOBA have both filed motions asking the PSC to:
- Return delivery rates to 2024 levels (before the vacated hike took effect)
- Issue customer refunds for the period of overcharging — most likely through bill credits
- Organize refund specifics within 30 days
Their argument is straightforward: if the rate hike approval was legally invalid, Pepco has no standing to keep charging the higher rates.
Here's what we know about next steps:
- No immediate rate change. OPC spokesperson Doxie McCoy confirmed there is "no immediate impact on rates."
- Evidentiary hearing coming. PSC Chairman Emile Thompson confirmed a hearing will occur but couldn't provide a timeline.
- Pepco will fight. The utility says it "remains focused on providing safe, reliable and affordable service" and stands by its multi-year framework.
The PSC could take months to schedule and complete the evidentiary hearing. In the meantime, your bills stay at the higher rate.
What Is the DC Public Service Commission?
The DC Public Service Commission ↗ is the independent regulatory body that oversees utilities like Pepco and Washington Gas in the District. Their job is to:
- Approve or deny rate increase requests
- Ensure utilities provide safe, reliable service
- Balance utility company needs with consumer protection
The PSC's three commissioners are appointed by the mayor. In this case, Chairman Emile Thompson and Commissioner Ted Trabue voted 2-1 to approve the rate hike. Commissioner Richard Beverly dissented.
Both Thompson and Trabue are up for reappointment, and there are growing calls from residents and advocates for the mayor not to reappoint them. Mayor Bowser's administration has faced criticism for what some see as a cozy relationship ↗ with Pepco's parent company.
Timeline of Events
| Date | Event |
|---|---|
| 2019 | PSC approves Pepco's $108 million rate increase |
| Late 2024 | PSC approves $123.4M multi-year rate hike (2-1 vote). Commissioner Beverly dissents, calls it a "regulatory trainwreck" |
| March 2025 | OPC and AOBA challenge the approval in DC Court of Appeals |
| Winter 2025-26 | DC residents hit with sky-high bills. Council members report $899-$1,100 Pepco bills. 2,000 more households fall into utility debt |
| Feb 27, 2026 | DC Council holds two-day PSC oversight hearing. Nearly 100 residents testify |
| March 6, 2026 | DC Court of Appeals vacates the rate hike approval, remands for evidentiary hearing |
| March 2026 | OPC and AOBA file motions to revert rates to 2024 levels and refund customers |
| TBD | PSC schedules evidentiary hearing. Pepco expected to push back |
What Should DC Homeowners Do Now
1. Monitor the PSC Docket
Follow the case at edocket.dcpsc.org ↗. You'll see filings from Pepco, OPC, and AOBA as the evidentiary hearing gets scheduled.
2. Contact the Office of the People's Counsel
OPC represents your interests as a utility consumer — for free. Call 202-727-3072 or visit opc-dc.gov ↗ for case updates and to submit comments.
3. Check If You Qualify for Assistance
If high bills are straining your budget:
- Pepco's assistance programs ↗ — LIHEAP and Pepco's own bill assistance
- DC Utilities Assistance ↗ — City-level support programs
- Energy audits — Free through DC Sustainable Energy Utility (DCSEU) ↗
4. Review Your Bill Carefully
Understand the breakdown between delivery charges (what Pepco controls) and supply charges (from your electricity supplier). The vacated rate hike affected delivery charges specifically. If you're using a third-party supplier, verify they aren't charging you above market rates.
5. Consider Long-Term Protection From Rate Volatility
This rate hike fight is just the latest in a pattern. The fundamental problem remains: as long as you're fully dependent on the grid, you're exposed to whatever Pepco and the PSC negotiate behind closed doors.
Why This Keeps Happening — And How Solar Stops the Cycle
Here's the pattern:
- Pepco requests a rate increase
- The PSC approves it (sometimes without proper scrutiny)
- Bills go up
- Residents complain
- Maybe a court intervenes — maybe not
- Repeat
This cycle has happened twice in five years, totaling over $230 million in rate increases. Even when the court steps in, like it did this month, rates don't drop immediately. The process takes months. And Pepco will almost certainly come back with another request.
Solar breaks this cycle. When you generate your own electricity, Pepco's delivery charges shrink because you're pulling less power from the grid. Here's what that looks like in practice for a typical DC homeowner:
Net metering credits you at the full retail rate for excess solar energy you send back to the grid. That means every kWh your panels produce is one fewer kWh subject to Pepco's rate increases. Learn how net metering works in DC.
SRECs (Solar Renewable Energy Credits) generate additional income — currently worth $300-$400 per credit in DC, with most homeowners earning 5-10 SRECs annually. That's $1,500-$4,000 per year in your pocket, separate from your electric bill savings.
The federal tax credit (ITC) covers 30% of your solar installation cost through 2032, making the upfront investment significantly more affordable.
Battery storage paired with solar lets you store excess energy for evenings and peak-rate hours, further reducing your dependence on Pepco.
The irony: every time Pepco raises rates, the payback period for solar gets shorter. A system that might take 5 years to pay for itself at 2024 rates could pay for itself in 3.5 years at current rates.
Want to see what solar would look like on your specific home? Check if your home qualifies — we'll show you projected savings based on your actual roof and current Pepco rates.
FAQ
Will my Pepco bill go down because of the court ruling?
Not immediately. The ruling vacated the approval, but rates stay at current levels until the PSC takes action. OPC and AOBA have filed motions to revert rates and issue refunds, but the PSC hasn't ruled on those motions yet.
How much could I get back in refunds?
It's unclear. If the PSC approves the motions, refunds would likely come as bill credits covering the period from when the vacated rate increase took effect. The exact amount depends on your usage and how the PSC structures the refund.
Can Pepco still raise rates after this?
Yes. Pepco will push for a new rate increase through the proper evidentiary hearing process. The court didn't say Pepco can't raise rates — it said the PSC didn't follow the right process to approve them. Pepco has already stated it stands by its multi-year framework.
What is an evidentiary hearing and why does it matter?
It's a trial-type proceeding where parties present evidence, call expert witnesses, and cross-examine each other's claims. It's more rigorous than the "legislative-style" hearing the PSC held before. This matters because Pepco's calculations differed from AOBA's by $49 million — and the PSC never investigated why.
How can I reduce my dependence on Pepco?
The most effective long-term strategy is solar installation with net metering. DC homeowners who go solar typically reduce their Pepco bills by 70-90% while earning SREC income. Battery storage adds further independence. Solar for All provides no-cost options for income-qualifying residents.
Is now a good time to go solar in DC?
Yes — arguably the best time. The 30% federal tax credit is locked in through 2032, DC SREC values remain strong, and rising Pepco rates mean faster payback. Every rate increase makes solar more financially compelling.
The Pepco rate fight is far from over. Whether the PSC reverts rates or Pepco pushes through another increase, one thing is clear: DC homeowners who generate their own power have one less thing to worry about.
Wondering what solar could save you? Get a free assessment for your DC home or explore solar installation in your neighborhood.
