Bethesda electric customers are paying about $3.94 more per month after Maryland regulators slashed Pepco's rate request by more than half.

The Maryland Public Service Commission on Friday, Aug. 28, approved a $50.9 million revenue increase for Potomac Electric Power Company (Pepco), less than half of the nearly $120 million the utility requested. The new rates took effect Aug. 28, according to the PSC's announcement.

For Montgomery County customers, the authorized increase amounts to 2.25%. Pepco had sought 5.85%.

The commission also blocked Pepco from passing $164.9 million in costs for its White Flint infrastructure project on to ratepayers. The PSC sided with the Maryland Office of People's Counsel, the Maryland Energy Administration and the Apartment and Office Building Association, which argued the spending was not prudent, as WUSA9 reported.

"Disallowing White Flint sends a message to utilities that imprudent spending will not be tolerated," Maryland Energy Administration Director Kelly Speakes-Backman said.

Pepco had argued the White Flint substation project would support redevelopment and economic growth in Montgomery County, including new homes, businesses and jobs. The PSC's order uses the phrase "disallowed at this time," leaving open whether Pepco could seek recovery of those costs in a future case.

The commission also lowered Pepco's approved return on equity to 9.40%, down from the company's current 9.50% and well below the 10.5% Pepco requested. The PSC denied Pepco's request to include projected future costs for inflation, labor and capital spending.

Gov. Wes Moore praised the ruling in a statement Aug. 29, calling it a major win in his administration's effort to hold utilities accountable and protect families and small businesses from excessive spending.

Pepco serves about 610,000 customers in Montgomery and Prince George's counties. The company pushed back. Valencia McClure, Pepco's senior vice president of government, regulatory and external affairs, said in a statement that affordability and reliability are not competing goals and that Pepco would continue proposing investments to meet customers' needs.

The rate case comes amid years of rising bills. Pepco's electric distribution rates climbed roughly 63% since 2020 and more than doubled since 2016, when Exelon Corporation acquired the utility, according to a May 2026 analysis by the Energy and Policy Institute. Exelon reported nearly $2.8 billion in profits in 2025, while Pepco reported $401 million.

PSC Chair Kumar Barve said in the commission's announcement that the order balanced reliable power delivery with fair rates for customers.

The PSC is opening a Phase II proceeding to review whether additional costs should be removed from rates under HB 1532, the Utility RELIEF (Reducing Energy Load Inflation for Everyday Families) Act. No date or public comment process for that proceeding has been announced. The full order is available through the PSC's official docket, Case No. 9820.