AG Racine Takes Enforcement Action Against Pepco for Systemically Mishandling DC Solar Energy Programs & Overcharging Thousands of DC Households on Their Electric Bills

OAG & OPC Allege Pepco Failed to Provide Promised Solar Credits to Low-Income Households & Undermined the District’s Efforts to Meet Clean Energy Goals

WASHINGTON, D.C. – Attorney General Karl A. Racine today announced that the Office of the Attorney General (OAG) and the Office of the People’s Counsel (OPC) filed a complaint against Pepco for systemically mishandling community solar projects, potentially overcharging more than 6,800 District households on their monthly electric bills, and undermining the District’s efforts to meet its clean energy goals.

“The District has tried to work with Pepco for nearly two years to address problems with community solar programs and ensure 6,800 households—including thousands of low-income residents—get the solar energy discounts they are owed. Unfortunately, these programs are still not working as intended, and residents continue to get overcharged on their electric bills,” said AG Racine. “Enough is enough. We have heard from numerous DC residents who are rightly fed up with Pepco’s seeming inability, intentional or otherwise, to allow for consumer choice and transition to clean energy, as required by law. What’s more, Pepco deprived low-income residents of assistance with their electric bills. We’re taking action now to uncover the true extent of Pepco’s mishandling of these programs—and to force the company to uphold its legal obligations so residents can receive the discounts they are entitled to and the District can continue to build a more sustainable and equitable future.”

“The District government has been working tirelessly to resolve the issues that are plaguing CREFs, to no avail. Because the utility has not fixed the issues on its own, OPC and OAG are asking the PSC to step-in and use its regulatory powers to investigate and bring the utility into compliance with the law and make consumers whole for benefits that they have lost,” said People’s Counsel Sandra Mattavous-Frye. “We remain hopeful that robust CREF and Solar for All programs will help residents and businesses have an equitable opportunity to reduce their energy burden while simultaneously ensuring that the District reaches its goal of reducing emissions. It is imperative that the Commission act now to enforce compliance, so consumers find the programs reliable, save them money, and support the city’s climate goals as intended.”

In a petition before the Public Service Commission, OAG and OPC detail allegations that electric utility company, Pepco, has failed to properly implement community solar projects. These projects are designed to boost solar energy production and use in the District while helping residents—including low-income residents—reduce their electric bills. But Pepco has failed to provide expected discounts on residents’ bills, failed to compensate owners and operators of the community solar projects (including the District government), and undercounted solar energy being generated, among other violations. With this petition, OAG and OPC are asking the Public Service Commission to open a formal investigation—including a third-party audit—into Pepco’s handling of community solar projects. OAG and OPC are also seeking to compel Pepco to provide relief for residents who were deprived of promised credits on their bills, compensate community solar project owners, and pay penalties for legal violations. 

Background on DC Community Solar Projects

As part of its effort to address the impacts of climate change, the District set ambitious renewable energy goals, including goals for local generation of solar energy. Installation of renewable energy generating facilities like solar panels allows residents to help reduce greenhouse gas emissions, and helps them save money on their energy bills, as they receive credit for any energy they generate. However, many residents don’t have the ability to install their own solar panels, including those who rent their homes, live in apartment buildings, or live on limited incomes. 

In 2013, the Council passed environmental justice legislation to encourage more local solar energy generation and to enable all residents to benefit from solar energy, regardless of the type of housing they live in. The law created a model for community solar projects (also known as community renewable energy facilities, or CREFs). Under this model, off-site solar panels are installed by developers, businesses, or District government agencies. Then, individuals living elsewhere in the community can “subscribe” to the installation. Subscribers receive a credit on their electric bill for the solar energy generated by their “share” of the project each month.

District residents can subscribe to a community solar project for free through the income-based Solar For All program run by the District Department of Energy and Environment (DOEE) or they can purchase subscriptions from private providers. The free Solar For All program is open to all DC household earning 80% or less of Area Media Income. Almost 5,000 households are enrolled in Solar For All, which accounts for 72% of DC’s community solar project subscribers. According to DOEE, Solar For All program participants should save 50% on their electricity bills over 15 years. However, DOEE and OPC have received numerous complaints from residents who are not receiving timely or accurate bill credits from Pepco.

OAG & OPC’s Complaint Against Pepco

District agencies, including OAG, OPC, and DOEE have been working with Pepco and trying to resolve issues around the utility’s mishandling of community solar projects for about two years, but problems persist. In a petition to the Public Service Commission, OAG and OPC allege that Pepco violated District laws governing the operation of community solar programs by:

  • Failing to provide promised discounts on energy bills: Pepco is systematically failing to provide more than 6,800 District households that participate in community solar programs with timely and accurate credits on their energy bills. Residents have complained about receiving lower than expected credits, or zero credits on their bills. (It would be impossible for subscribers to receive zero credits, unless a solar facility was damaged or offline for an entire month.) Program participants have also reported receiving confusing and inaccurate bills, multiple bills for the same time period, or incorrect bills showing they are carrying balances, and that it is extremely difficult to get Pepco to correct billing errors.
  • Harming low-income DC residents: Pepco’s failure to properly provide credits on energy bills harms low-income DC households who have difficulty affording their energy bills without assistance. These residents enrolled in DOEE’s Solar For All program to lower their energy bills, and when they do not receive promised credits, they may be faced with the threat of their electricity being disconnected. 
  • Failing to pay DOEE and other owners of community solar generation facilities: In addition to providing credit on electric bills to subscribers of community solar generating facilities, Pepco is required to pay the owners of the facilities on a monthly basis for any “shares” of energy produced that do not belong to subscribers. These payments are intended to help cover the cost of building and operating these projects. However, Pepco has failed to pay the owners of these projects—including DOEE—what they are owed.
  • Undercounting solar energy that is being generated: Pepco is undercounting solar energy generation, including by unlawfully installing its own electrical meters. The unlawful and unnecessary installation of extra meters is creating delays and causing incorrect meter readings and errors.
  • Undermining the District’s ability to reach its climate goals: OAG and OPC assert that Pepco’s mishandling of community solar programs have weakened public confidence in the programs, caused financial harm to the organizations that own and operate them, and are undermining the District’s ability to meet its ambitious carbon reduction goals.

OAG and OPC’s petition is available here.  

With this petition, OAG and OPC are asking the Public Service Commission to open a comprehensive investigation to determine the true extent of Pepco’s mishandling of community solar projects; force Pepco to provide restitution to community solar project subscribers and owners, including DOEE; sanction the utility for repeatedly violating District law, and ensure that Pepco will comply with the law moving forward. 

OAG’s Environmental Enforcement Work

Over the last three years, OAG has—with the support of the Council—deployed new resources to protect the environment and address persistent local environmental problems, including those that disproportionately impact low-income communities. OAG won a $400,000 penalty from a developer for violating District laws that protect residents from toxic lead; obtained a $350,000 penalty from a property owner that leaked toxic used oil in Ward 5; forced a landlord to clean up lead paint that put children at risk; recovered $52 million from Monsanto for its role in the spread of toxic PCBs in the District’s waters and other natural resources; and settled a lawsuit with Greyhound over air pollution violations at Union Station that led the company to adopt bus anti-idling policies nationwide. OAG has also recovered $2.5 million from a power plant that discharged oil into the Potomac River and is deeply involved in the District’s ongoing cleanup of the Anacostia River. Additionally, OAG joined multistate lawsuits to stop the Trump administration from rolling back critical environmental protections, such as auto emissions standards and Clean Water Act rules

District residents should report suspected violations of environmental law to DOEE through a smartphone app available here