Opinion: D.C.’s lax utility oversight is costing customers

Energy affordability has become a defining kitchen-table issue across the country and especially in the Mid-Atlantic, where it was top of mind for voters in races for governor in Virginia and New Jersey. In D.C.’s mayoral election this year, it’s likely to be a top issue, given the sharp utility rate hikes approved by regulators.

Energy costs are up across the nation, and the problem is particularly acute in D.C., where electricity rate increases approved by regulators have dwarfed those of Mid-Atlantic states. From 2017 to 2025, D.C.’s average residential electricity rates soared by nearly 70%, more than double the rate increases in Virginia and Pennsylvania and roughly 50% more than increases in Maryland. 

Surging electricity demand from data centers contributes to the problem, but it does not fully explain D.C.’s outsized rate increases. Virginia is considered “the data center capital of the world,” but D.C.’s electricity rates in recent years jumped twice as much as those of Virginia's largest utility despite the District’s lack of major data centers.

Part of the blame lies with the Public Service Commission (PSC), which regulates D.C.’s monopoly gas and electric utilities, and has approved rate increases that fueled the skyrocketing costs. In 2024, the PSC approved a multi-year plan allowing Pepco to collect $123 million in additional revenue, which will raise the average customer’s monthly bills by $11.34 per month — roughly $136 per year — once it’s fully implemented. This is despite the fact that the utility failed to detail exactly how the money would be spent.

One PSC commissioner voted against the electricity price spike, describing it in his dissent as “a regulatory trainwreck that unreasonably promotes Pepco’s interest at the expense of ratepayers.” He said the rationale for the rate hike “could be summarized as ‘because Pepco said so.’” The D.C. Court of Appeals last week tossed out the 2024 multi-year rate hike because the PSC failed to address factual disagreements over calculations Pepco used to calculate its rate increases. 

The Public Service Commission is an independent agency, meaning that while the mayor nominates and the D.C. Council confirms the commissioners, they do not report to the mayor like most agency leaders. But the council passes laws setting the statutory framework that the PSC must follow and holds annual oversight and performance hearings. 

From 2017 to 2025, that duty fell to Kenyan McDuffie, the former councilmember and current candidate for mayor who chaired the committee with oversight of the PSC. I have attended and testified at every PSC oversight hearing since 2019. I watched as McDuffie lobbed softball questions at the commissioners, such as, “Let me know whether you think the commission struck the appropriate balance” on utility regulation. Not surprisingly, the PSC chair thought the commission had indeed “struck the appropriate balance” on questions of rising costs. 

Despite McDuffie's minimal oversight while leading the committee that supervises utility regulators, he nonetheless acted vigorously on utility issues. In 2018, he stripped from a landmark energy law a provision that would require Pepco to lower electric bills with long-term contracts for renewable energy. At the time, Massachusetts projected savings of $682 million from requirements similar to those that McDuffie removed. But Pepco was on the same page as McDuffie, with the utility even running misleading ads about it on Facebook.

With McDuffie’s resignation from the council to run for mayor, PSC oversight has shifted to the committee chaired by Ward 6 Councilmember Charles Allen. He could pass legislation to slow or stop utility rate increases.

Most D.C. residents are not thinking about utility regulation when they look at their monthly bills to try to figure out how to keep up with D.C.’s rising costs. But decisions made by regulators and elected officials directly shape the bills families have to pay. Kenyan McDuffie could have scrutinized utility rate hikes and defended struggling ratepayers. Instead, he sided with utilities. Now D.C. families are paying the price.

Mark Rodeffer is a renewable energy advocate who lives in D.C.