The District of Columbia Public Service Commission (PSC) has rejected a proposal by Potomac Electric Power Co. calling for rate recovery of lost revenues associated with demand-side management (DSM) activities. While approving a special surcharge for budgeted direct DSM program costs, the PSC found that the utility "simply has not demonstrated that the sums identified by PEPCO as lost revenues are attributed to DSM programs, and not other factors." The PSC also added that lost revenue recovery was not required as a matter of equity because the utility benefited from the DSM activities funded by ratepayers, which helped the utility offer valuable energy resources at least cost, and enabled it to establish improved business relationships with its customers, "a benefit of increasing importance in a competitive environment," according to the PSC. Re Potomac Electric Power Co., Formal Case No. 917 Phase II, Order No. 10650, June 30, 1995 (D.C.P.S.C.).
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