DC Councilmember Charles Allen's Spin Machine & The GRID Act

AT the DC Council’s Committee on Transportation and the Environment vote last week on The Guiding Renewable Interconnection and Distribution (GRID)Amendment Act of 2026, Ward 6 Councilmember Charles Allen, who chairs the five-member panel, quieted questions raised by his members about proposed changes to the rate of equity (ROE) or return for utility investor provisions, by asserting that the formula would be developed by the Public Service Commission (PSC). That was an indisputable example of an elected official being blatantly disingenuous or more accurately deliberately misinforming the public, which is consistent with shifting political ethics in the era of Donald Trump.

Responding to one member’s concerns and undoubtedly those expressed by Council Chair Phil Mendelson along with Amber Perry, Pepco’s regional president and Brandon Todd, Washington Gas Light’s vice president of government affairs and public policy, Allen claimed that the bill, “leaves the [PSC] to make its own determination” about whether to change the rate of return using the Treasury’s 10-year note plus 2% as proposed in the GRID; that essentially could result in a ROE that is 7.5% or less.

“To address the exponential growth in spending by utilities over the last decade, the GRID Act instructs the Public Service Commission to re-consider how guaranteed profits are calculated and passed along to customers,” said Allen in the opening comments of the committee meeting.

“It’s directive but not prescriptive,” he later explained to at-large Councilmember Christina Henderson, a committee member.

Once again, Allen seemed to be misinforming the public. Surely, he knew then that utilities aren’t actually “guaranteed” profits. They are given a target or authorized ROE they can try to reach.

What he also failed to mention is that the GRID Act, as written, would expand the PSC from a 3-member panel to 5 members. Currently there are only 2 members.

Despite the fact Mayor Muriel Bowser sought to reappoint chair Emile C. Thompson and member Ted Trabue, Allen refused to hold public hearings on their nomination, leaving the independent commission handicapped to do its work.

I previously reported that Allen personally told Thompson and Trabue that he would expand their term only until March 2027.  Thar could mean the incoming mayor, Janeese Lewis George, would be able to stack the PSC with at least four new members--all beholden to her.

As the Ward 4 Councilmember, Lewis George currently sits on the Committee on Transportation and the Environment. In other words, she voted to extend mayoral powers--new powers that will advantage her and her allies as soon as she is sworn in. If that is not an outright conflict of interest, it looks and smells like one to me.

Let’s be clear, Lewis George did not recuse herself from the vote last week.

If you believe that Lewis George will nominate someone to the PSC next year that is independent-minded and that does not align with her position or Allen’s position aimed at decreasing the ROE for local utilities, bridges are being sold at 14^th and Pennsylvania Ave. NW.

Go get yours!

Ward 5 Councilmember Zachary Parker is already in line. He joined Lewis George and Allen in voting The GRID Amendment Act out of Committee.

Henderson also voted to approve the bill but, apparently, she continues to have questions. At-large Councilmember Elissa Silverman was not present at the committee meeting.

Allen has broadly insisted that in response to the crisis of rising utility costs, he and his colleagues held hearings in an effort to fast-track “affordable and clean solar power” while “preventing predatory practices by third party suppliers, among other issues. This kind of bold action is long overdue, and the end product is the first major utility and PSC reform legislation passed in the District in 25 years.”

There may be some benefits in the bill, but most of the legislation contain questionable changes with potential adverse consequences. Understandably, opposition is growing.

As a result, Allen has pushed for a quick first vote by the full council. That may come as soon as Tuesday, Nov. 10.

Mendelson seems to have taken a go-along-to-get-along posture. Although he has articulated problems with the legislation, it appears he has done nothing to slow its advancement.

Should he push to postpone consideration of the bill at Tuesday’s meeting? Should he request the legislation be tabled until an additional hearing can be scheduled, especially since some critical portions like the ROE adjustment were added without prior comments from residents or utility companies.

Close observers of DC politics are not surprised by the fact that Allen sometimes spins the facts, engaging in propaganda, hyperbole and mythmaking on his way to securing a legislative victory. As chair of the Committee on the Judiciary and Public Safety, he led the council’s effort to reduce funding for the DC Metropolitan Police Department, partially discrediting multiple police chiefs. He pushed out two of them, instigating a period of low morale and under-performance.

During that same period, Allen advanced budget legislation that encouraged overspending for the city’s two violence interrupters programs, knowing that at the time no data existed supporting advocates’ claim of outsize achievement or success. His failure to conduct adequate oversight resulted in a slush fund that was exploited by government workers and contractors, one of whom may have been aided by at least one councilmember. In fact, a  report by the city auditor and outside researchers found several cases of corruption.

   Now, Allen has proposed omnibus legislation that essentially reshapes a legislative branch committee into a regulatory agency, handicapping the Public Service Commission that by law is the independent entity charged with overseeing utilities in the District.

No one should believe Allen’s actions are by accident. He is clearly responding to a special constituency--environmentalists, including Sierra Club DC--at the expense of utility ratepayers.

Meanwhile, the hell-paying will be suffered by DC residents, according to experts. Pepco and Washington Gas Light have asked the council to delay its vote. Short of that, they have asserted that inclusion of changes to the ROE and restrictions on multiyear ratemaking processes should be removed from the legislation.

Pepco developed and began distributing last week  one-page information sheets that better educate the public about The GRID Act. The company identified 10 concerns, including that the bill would increase the costs of financing that could be passed onto customers; it could put Pepco’s credit profile at risk, which surely would impede borrowing or make it more expensive. By law, the public could be required to cover some of those costs; and it could restrict the PSC’s ability to respond to changes in the market, among other things.

Just to be clear, neither Washington Gas nor Pepco is slamming the entire bill. In fact, there are parts where each has duly praised the city, noting, for example, that permitting so-called solar balcony installation will help bring down utility costs especially for renters and low-income residents, although Pepco correctly is pushing to extend battery storage opportunity to its company.

No one has complained about the inclusion of Lewis George’s bill-- Public Trust in Utility Regulation Act of 2026--that would require audits and various documents before the PSC approves any rate increase, never mind that there are redundancies in such demands.

Surprisingly, no one has raised concerns about controlling the third-party retailers who have entered the market promising to provide less expensive electricity or gas.  As part of her Fiscal Year 2027 Budget Support Act, Mayor Bowser included the Retail Energy Market Consumer Protection Amendment Act in order to “end the predatory and deceptive practices that have saddled too many residents–many of them low-income–with high utility bills,” Allen explained during his committee meeting.

He noted that the “District allows residents to purchase electricity from several different entities, not just Pepco. These other entities are called third-party retailers.

“The hope was that increasing competition among electricity companies could lead to better outcomes and lower prices for residents, as each of these companies competes for customers,” continued Allen. “But this has played out much differently in practice.”

Instead, residents have been stuck with higher utility costs, which the city has had to cover through its various assistance/subsidy programs.

What’s more, when residents continue to be unable to pay the retailers, those companies simply bundle that debt and transfer it to Pepco. “The retailers get paid nearly 100% of the debt owed…and then Pepco has to charge other ratepayers to cover the difference,” Allen explained.

Instead of sending DC's attorney general to visit these companies, Allen and his committee members have set a “cap on what third-party retailers can charge…at 110% of the standard offer or service provided through Pepco.”

That sounds like a potential 10% profit to me. That is being offered at a time when Allen and friends want to radically reduce the ROE for Pepco and Washington Gas Light.

What’s more, “if a [third-party] retailer provides electricity from sustainable sources and charges a higher rate because of the increased costs of generating that clean energy, they can exceed that 110% cap,” added Allen.

That last bit makes clear whose bidding Allen is doing--it is not DC residents.

   Oddly, the PSC is regulating issues that affect only 27% of consumers’ bills. There are many more areas that deserve the attention of Allen and his council crew, who seem intent on wrecking utility companies.

For example, legislators could consider the bevy of surcharges that are passed on to consumers. There are subsidies and incentives for solar producers, some attached to DC’s renewable energy portfolio. Getting companies to focus on clean energy is admirable. However, the District may have gone overboard.

Consider that the federal Department of Energy has calculated that 15.1% of DC electric bills are attributable to its renewable energy standards.

The reduction of surcharges and subsidies could bring direct relief to DC ratepayers without jeopardizing the health of its utilities.

Interestingly, as this debate about Allen as utility regulator rather than elected official charged with public policy and oversight continued, Concentric, Energy Advisors, released a white paper entitled “ Return of Equity and Financial Integrity: Sustaining Investment, Reliability and Affordability,” dated Nov. 5.  The document examines “the role of return on equity (ROE) in utility regulation and, in particular, the relationship between authorized ROEs, customer bills and the cost of providing service, and utilities’ ability to attract the capital needed to provide safe and reliable service.”

Concentric argued that utility ROEs are among “the lowest compared to other industries…getting investor capital is “critical to lower customer rates.” Further, ROE “represents a relatively small component of the customer bill as considered in the context of the broader cost of providing electric service.”

Ultimately, the advisors asserted that imposing a “materially lower ROE without clear evidence that capital costs have declined or the utility’s total risk has fallen” can result in a bunch of issues--not the least of which is “raising risks and costs for customers.”

Why doesn’t Allen and crew get it?

Maybe they do. Maybe they’re trying to satisfy the demands of political allies who got them over the finish line in this recent election. In which case, logic and District residents may end up being the victims.

TheBarrasReport covers political and cultural news and trends; it is published twice monthly by jonettarosebarras.com. If you have tips or story ideas, please send them to thebarrasreport@gmail.com