“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, Chairman, President and Chief Executive Officer. “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. We remain committed to system reliability and improving the customer experience, but expect timely cost recovery and reasonable regulatory returns. Given the decisions in the Maryland rate cases, we will extend the current hiring freeze and rigorously review our overall operating expenses in Maryland. We remain committed to delivering earnings sufficient to maintain our current dividend level.”
Rigby also noted the impact of a powerful storm that struck the service territory. “In late June, our electric system was once again tested with the arrival of a violent and destructive storm. The high winds uprooted trees across our service territories, causing significant damage to the electric system. Approximately 702,000 customers were without power at the height of the storm, or about 38 percent of our electric customers. By many accounts, this storm was the most destructive storm to strike the Mid-Atlantic region in almost a decade. Our efforts to enhance reliability and customer service over the past two years proved beneficial during the restoration process.” Rigby noted that given the timing of the storm, the impact to the second quarter results was negligible, as most of the costs incurred will be reflected in the third quarter.