» BGE gets conditional approval for smart grid plan

BGE gets conditional approval for smart grid plan

Posted: 9:32 pm Fri, August 13, 2010
By Ben Mook
Daily Record Business Writer

BGE received conditional approval Friday for its smart grid proposal.

The Maryland Public Service Commission on Friday approved Baltimore Gas & Electric’s smart grid plan with the condition that the utility could not assess a surcharge upfront to customers to help pay for it.

The PSC’s decision came a few days before the U.S. Department of Energy’s deadline to decide whether to redirect the $200 million in stimulus funds it had awarded to BGE. The federal agency had said it would decide Monday if the company, which has already spent $33 million on the proposal, would get the full amount if the BGE plan was not approved.

The PSC’s decision came with conditions, including one involving a surcharge to customers to help recoup costs upfront.. The utility had cast doubt as to whether it would proceed with the smart grid proposal if the commission did not allow a surcharge.

Smart grids use two-way communication between power suppliers and upgraded power meters at homes and businesses to reduce electricity demand during peak hours, when power is most expensive.

The company had proposed a plan where it would collect 25 percent of the project’s cost through a surcharge and the rest would come later through rate increases that have to be approved by the PSC.
The commission acknowledged that its decision now puts the ball in BGE’s court.

“Whether or not to go forward is, obviously, BGE’s decision,” the commission wrote (in a report issued Friday.

The company did not have an immediate response on Friday as to how it would proceed.

“We are reviewing the order and we will respond in due course,” Robert Gould, a spokesman for BGE’s parent, Constellation Energy Group Inc., said.

With a surcharge off the table, the company will have to come before the commission in the future and make a case for why it needs to raise rates to cover the costs of implementing the smart grid plan.

“As with any major infrastructure investment, however, BGE’s customers deserve appropriate protection against bearing all of the project’s technological and financial risks,” the commission wrote.

In arguing for the surcharge during a hearing last week, Mark W. Case, BGE’s senior vice president of strategy and regulatory affairs, told the commission the utility remained a little gun-shy about major capital investments because of prior brushes with the PSC over rate freezes, mergers and other issues. The commission acknowledged this in granting the proposal, and said the company would be treated fairly when they came before them for rate increases.

“BGE’s perception of risk appears to flow in some part from a fundamental mistrust of the regulatory process in this State, from a sense that BGE is not treated fairly by this Commission or in the Maryland regulatory environment,” the commission wrote. “We will not say more on this latter point other than to disagree, respectfully. This Commission consistently has treated BGE or its parent fairly and according to the same standards that apply to any other public service company.”

Comments

William says:

Abolish the DOE and save taxpayers #25 billion a year. The DOE was established to reduce our dependence on foreign oil and they’re out hawking smartgrids as if that will accomplish their mission. We now use 40% more foreign oil than when the DOE was founded. Get rid of them and their smartgrid nonsense.

Posted on 08/13/10 at 11:15 pm
me says:

another increase with BGE… what a ripoff… They don’t need money from the gorernment. They get assistance to pay for it and we the taxpayer have to pay with incrrease in gas and electric. Go Figure someonen else other then BGE is lining their pockets with money.

Posted on 08/14/10 at 2:11 am
Michael says:

So basically the PSC is throwing all of us retirees under the bus. If you are going to base you usage on time of day then we are the ones who are going to be hit the hardest. We are on a fixed income and I would say a lot of us are home all day long. So that means we are going to be using energy during the “peak” time. I honestly think they need to hit the businesses with the increase because they can afford it far better then retirees can and on top of it they will get it back because they will increase the price of the items they sell in order to make up for the extra expense. Retirees on the other hand have a limited income from their retirement check and social security (if they are old enough). This is telling me that I should turn off everything in the house until the peak time of energy use is over and then I can turn it all back on. This is the thanks that we get for working jobs for over 40 years and paying our fair share in taxes, helping to raise our children who go out and become income earners as well. Just seems they are trying to make sure we all stay on the job until we drop dead or else they will either increase stuff on us until we can’t afford it or we should just consider dying on the job.

Posted on 08/14/10 at 10:23 am
Greg says:

There goes The Baltimore Gangster’s of Energy(BGE) getting there way again with all these approvals by The PSC, Maybe the PSC should be changed and it’s members should be Customers or should I say victims of BGE’s crimes. And why are they getting help from the Government? They aren’t destitute. It should be going to the people who need it and stop lining SHattuck’s pockets and his bank account.

Posted on 08/14/10 at 3:34 pm
BM says:

BGE is already too high! Need someone to bring this bills down. If BGE can not afford to run the energy at reasonable price and expense, stop paying CEO’s millions of dollars each that could be used to run operations, then they should be regulated or give energy generation to it back to the people. We can do better! We may not like government running things but atleast they work for the people, WE.

Think about it and thank you for reading

Posted on 08/14/10 at 6:24 pm
BM says:

Oh, forgot to give an example of government ran utility that is doing just fine. Look at the running water. Run by the Baltimore city local government and very reasonable. Imagin if BGE was running it. PLEASE dont even think about it!

Posted on 08/14/10 at 6:32 pm
Rodney says:

BGE is the biggest rip off company in the state of maaryland(along ith the politicians that stand up to their nonsense and lies. In the past 3 years (thanks to Omalley and friends)hae allowed te energy company to increase their rates by a whopping 87% and the cost of living just can’t keep up. NOW, at a time when jobs are scarce, incomes are low or non existent these people are talking price hike and penalization to those who have no option but to stay put during the daylight hours. My politician will hear of this when his/her a$$es are standing in the unemployment line in November. You guys will not be satified until you have terminated the energy of the same people that have kept you in business. You are some greedy bastards….

Posted on 08/14/10 at 6:33 pm
bill says:

The good news. I’am moving out of state.The bad news maryland is a tax train wreck.

Posted on 08/15/10 at 4:38 am
Anne says:

What is the benefit to the residential consumer? So BGE will have these expensive Smart Grids that will allow them to cycle power on and off to the consumer, in an effort to reduce the strain of the demand during peak hours, and they want to raise the consumers rate to boot? So, are they asking for the technology to screw us and asking us to pay for it as well? Sounds like BGE. Sounds like Maryland. Time for a change — Goodbye O’Malley.

We’ve not been able to afford, for years, to use air conditioning since BGE raised our rates more than 50%. Yes, the summers are especially uncomfortable but we have to do what we have to do. In winter, we use a wood burning stove to try to heat our house the best we can because we just can’t afford the astronomical electric bill. And now BGE wants to raise our rates? WTF!

Posted on 08/15/10 at 8:47 am
Anna Renault says:

What is BGE’s annual profit? Do they really need a larger one rather than acknowledging they already drain their customes dry?

Posted on 08/15/10 at 10:06 am
BM says:

I agree!

Posted on 08/15/10 at 10:38 am
Laura says:

Yet another rate increase from BGE? Why am I not surprised. After the debacle I suffered this summer with their “Peak Rewards” program. Being lied to constantly by BGE (“oh no you’re not enrolled in the program” boom I receive the bill with the credits, only to be told I AM forcibly enrolled in this scam), having their Peak Rewards program advertising only 5-6 air conditioner cycles per season… and I was informed by a customer service rep that this week ALONE there were 2 cycles and he refused to tell me how many in the previous week.
I’m putting my money where my vote is. To stop the scamming of customers by BGE and Constellation Energy. To stop the lies. And to make this billion dollar company responsible for their own problems such as infrastructure. By doing the “smart grid” THEY save money by not having to build another power plant which they desperately need. Instead they’re putchasing power from other grids at an inflated price to put a bandaid on this aging infrastructure. Spend the money you keep taking from us BGE and build a new power plant. New power plant would mean more jobs for Marylanders not to mention a more stable grid. Another nuclear plant would be ideal, not only for its efficient power generation but also for its relative safety and less dependance on foreign oil, drilling for natural gas, or mining for coal.

Posted on 08/15/10 at 2:55 pm
Tim W. says:

Well, the real scoop on Smart Meters and the Smart Grid grid has not been made know.
As usual the media and the politicians have it wrong again. Besides it was the politicians in 1999 that sold the public and BGE down the tubes and the media backed them. The same media now that hasn’t taken the time to really learn about what completive rates that could be in effect with smart time pricing. The PSC and the public cries for lower rates and the PSC kicks BGE for trying to be on the competitive edge. Yes, the capitol cost to the public even at a annul cost of about $3.60 is small ,but still a cost to the public. BGE should weigh it’s decision and know the current politics, the PSC and especially the current governor will never see eye to eye with BGE. What does a Smart Grid and a Smart Meter do for the homeowner and small businessman? One, you do not have to have time of use rates, for those who currently have time of use they can continue and be on the cusp of changing usage pattern. For those that have the standard non-time of use electric meter it can be business and usage as usual. With this technology you could know your usage in intervals during a given day. You then adjust your conditions to suit your own budget. Two, what a Smart Meter/ Grid can do for all is when your electric service goes out you don’t need to call BGE as you do know. The Smart Grid knows about the outage at the time of the occurrence. But, calling to identify a tree down ,pole ,wire down would still be imperative to getting service restored faster.BGE would know the source that it is out, but the source helps dispatch the proper crew for restoration.
Now Smart Energy rates with a Smart Meter makes great sense and can be configured so in the future you configure your energy rate to fit your own lifestyle if you so choose. But, this is the cusp of change, think about how you banked, shopped and did business fifteen years ago. Well, given the chance a Smart Grid and a Smart meter will enhance lifestyles and budgets if given a chance.

Posted on 08/15/10 at 3:52 pm
genec says:

You’ve got to be kidding. BGE gets $200 million of our tax money as stimulus and then they want an upfront surcharge from their customers to recoup 25 percent of their “cost.” Isn’t the $200 million enough? Then, of course, later on they will want further rate increases to cover additional costs for this smart grid, regardless of a surcharge or lack there of.

Does any utility have to absorb any of the costs of doing business? And don’t these costs become taxable write-offs for the business?

So BGE will benefit thrice: Once with the $200 million stimulus. Secondly, with the tax write-off. And third, with the rate increases which will surely come as night follows day.

How are these members of the PSC chosen? Are they appointed or elected? And, are they allowed to have any vested financial interests in BGE?

Posted on 08/15/10 at 6:50 pm