has allowed Potomac Electric Power Co. rate recovery of costs associated with the development of electric vehicles for fleet use under alternate-fuel vehicle requirements imposed under the Energy Policy Act of 1992. The PSC rejected a request by the Greater Washington Petroleum Committee, an oil industry trade group, to deny funding because electric vehicle technology had not evolved to a point that promotes consumer acceptance of a competitively priced vehicle. The trade group argued that the utility had failed to show that it had examined lower-cost alternatives, such as vehicles that use other nonpetroleum fuels like natural gas alcohol or liquified petroleum gases.
The PSC also authorized Potomac Electric to continue using its automatic adjustment mechanism for fuel costs despite claims that the mechanism should be modified to shift some of the risk of fuel procurement from ratepayers to shareholders. The PSC accepted Potomac Electric's evidence that fuel costs were optimized, generating facilities were operating efficiently, fuel price and interchange cost volatility remained a concern, and that removal of the fuel clause would adversely impact the utility and its customers by driving up operating costs over the long term.
The PSC further permitted Potomac Electric to begin phasing out its current discount for residential "all electric" service. It criticized the utility, however, for failing to implement conservation programs designed to mitigate the effects of the change on ratepayers. In a move to soften the effect of the shift, the PSC halved the utility's proposed .05-cent reduction in the existing 1.725-cent winter heating discount for all-electric ratepayers.