Pepco attributes large 2023 corrective‑maintenance overrun to aging infrastructure and emergent work; company says it does not run cost‑benefit on required work

Amber Karina Young, PEPCO’s vice president of technical services, testified at length about the company’s corrective maintenance spending for 69 kV infrastructure and defended the increases that produced a large overspend in calendar year 2023.

Key figures from testimony and exhibits: Young identified ITN 63711 (Pepco 69 kV planned corrective maintenance) in her testimony’s tables and confirmed the company’s numbers: projected 2023 expenditures of $2,786,000 and actual 2023 expenditures of $10,019,000 — an overspend of $7,233,000, or about 260% relative to the originally filed budget. She acknowledged that subsequent project list updates increased the company’s internal 2023 budget for ITN 63711 first to $4,639,000 (01/31/2022 filing) and then to $6,126,000 (01/30/2023 filing), reflecting iterative budget revisions.

Why Pepco says spending rose: Young told the commission that corrective maintenance projects respond to real‑time field conditions and inspection results and that an aging system plus unbudgeted emergent needs drove higher spending. "This program addresses immediate and unexpected maintenance needs that arise during daily operations," she said, distinguishing emergent corrective maintenance from planned corrective maintenance. She also said declared storms are treated separately: "storms are not included in that number."

Lack of cost‑benefit analyses for required work: When pressed whether she had performed quantitative cost‑benefit calculations for the corrective maintenance expenditures, Young responded that Pepco does not perform benefit‑to‑cost analyses for projects "that are required for safe and reliable service of our customers." She said these projects are required and that management would look for offsets elsewhere in the budget if necessary.

Questions from intervenors and staff: AOBA and OPC counsel pressed Young on whether the company had quantified the backlog of poles needing replacement or otherwise provided a detailed numeric justification for specific dollar increases. Young pointed to tables in her exhibits that list pole defect counts and drivers of increased spend (e.g., unplanned overhead/underground replacements, emergent corrective maintenance), but she said she did not have a single consolidated backlog number and could not point to a cost‑effectiveness threshold at which further work would be considered imprudent. "We would have to make that decision on where else can we make cuts in order to support this type of project," she said when asked how the company would constrain spending.

Other clarifications: On a related question about feeder remediation costs, Young clarified that the correct cost for certain feeders (14229 and 14223 referenced in staff testimony) is $492,000, amending a previously reported $478,000 figure.

Why it matters: The large variance between budgeted and actual expenditures — and the company’s stated practice of not running cost‑benefit analyses for required reliability projects — are focal points for the PSC’s prudence review. Intervenors argued the company made on‑the‑fly adjustments that should have been classified differently or more transparently; Pepco said the adjustments reflected necessary responses to aging infrastructure and emergent conditions.

Limits: The transcript records the cross‑examination and Young’s answers. The hearing record does not include a commission determination on whether the costs were prudent or recoverable in rates; PSC staff and intervenors may seek additional discovery to reconcile budgets, scopes and backlogs before the commission rules.