State utility executives are grilled over power outages
Posted: 7:47 pm Tue, February 8, 2011
Daily Record Business Writer
ANNAPOLIS — As calls grow for new laws that would hold utility companies responsible for sub-standard responses to power outages caused by storms, executives from Pepco, Baltimore Gas & Electric Co. and Allegheny Power were grilled Tuesday by members of the Maryland House of Delegates.
A wave of winter storms and a summer that saw thousands of homes without power for days sparked criticism for how companies, especially Pepco, handled the problems.
The executives testified before the House Economic Matters Committee. Tuesday’s hearing was separate from those for bills introduced last week by Gov. Martin O’Malley that would implement reliability standards for Maryland utilities that deliver power to residences and businesses — including BGE and Pepco. The legislation would require the Maryland Public Service Commission to adopt “enhanced” standards for reliability.
Failing to meet the new standards would draw fines for the utilities that would then be redirected back to ratepayers. The utilities would not be able to recover fine money through rate increases.
The performance of utilities has been a hot button issue since last year, when thousands of people experienced multi-day outages. During an August hearing about reliability issues before the PSC, Pepco officials acknowledged that when it came to the frequency of power outages, the company ranks in the bottom half compared to other utilities. The company told the commission that moving up in the rankings would be a multi-year effort
Pepco Holdings Inc. President Thomas Rigby said Tuesday the company had a six-point plan in place to address reliability. He said the five-year plan has a budget of $256 million and includes focusing on tree trimming, burying of lines and fixing aging infrastructure.
Rigby said fixing these issues would be his “number one priority.”
“I see this as defining my legacy as CEO,” Rigby said.
Rigby told the committee that he won’t accept about $900,000 in bonus compensation this year. According to the company’s proxy statement, Rigby’s 2010 salary was $880,000.
“It’s not the right thing to do,” he said.
The promises were questioned by some committee members, especially those from Montgomery County, in Pepco’s service area. Del. Benjamin F. Kramer, D-Montgomery, said that he hears about power outages more than any other issue from upset constituents.
“The greatest number of complaints I get from people back home is about Pepco,” Kramer said. “I’m not a fan.”
Kramer, who said he experienced multi-day outages, said that, in his opinion, the company’s promises and plans did not amount to much.
“You’ll have to excuse me if I’m skeptical about this that Pepco’s suddenly come to the Lord and they’ve seen the error of their ways,” Kramer said. “And, now we can anticipate that Pepco is going resolve issues that have evidently lasted for years.”
Kramer also criticized the company for its customer service and communications, and said he personally knew of two facilities with elderly patients that were without power for 70 hours and could not get any information from Pepco.
“That’s inexcusable,” he said.
The other power utilities brought in were questioned far less than Pepco, whose officials were before the commission for more than an hour. BGE representatives, for example, fielded a few general questions.
“You’re not on the hot seat, just the warm seat” said committee Vice Chairman David D. Rudolph, D-Cecil.