The state's energy regulator on Wednesday fined Pepco $1 million for failing to properly maintain the utility's electricity grid, resulting in prolonged and frequent power outages during storms and normal conditions.
In its order, the Maryland Public Service Commission said Pepco, which serves Maryland customers in Prince George's and Montgomery counties, "compounded those reliability problems through poor customer communication."
The fine came more than a year after the PSC initiated an investigation into Pepco's reliability, which was prompted by numerous customer complaints. The utility also faced intense criticism from customers and lawmakers following the twin snowstorms that hit Maryland in February 2010.
The PSC also found that Pepco's expenses related to reliability this year went up because of "imprudent and inadequate expenditure and neglect."
When the commission reviews Pepco's next request for a rate hike, the panel said, it plans to review the utility's 2011 and 2012 expenses and disallow any cost increases due to Pepco's "imprudent management" in previous years.
Last week, Pepco asked to raise its delivery rates by almost $64 million.