As I have written here at SG News in the past, there is a basic bargain that must be reached between utilities and their regulators for SG to move forward on a large scale. The utilities must be willing to leverage the technology (AMI, DA) to enhance system performance, operational efficiency and customer satisfaction and be accountable for outcomes. In return regulators need to provide a more reliable or predictable cost recovery. That is btw the essence of what Comed and Ameren agreed to do in Illinois and that is what the legislation there sets in motion.

In the Maryland example, the solution is simple and actually shouldnt require a separate set aside in bills. Instead storm or outage restorations should one part of a comprehensive performance metric. In VT while I was a regulator we had Service Quality Reliability Plans (SQRP). Those plans had criteria for SAIFI and CAIDI. The the flaw was that the scheme was not symmetrical. There were only penalties when the utilities missed on the criteria, no upside for being superior. A central flaw in our legacy cost of service ratemaking.

It is understandablke that there is political interest in storm restoration, nothing unites and frustrates customers more than outages. But there is a very fruitful, positive path to meeting the challenge.

David O'Brien

Bridge Energy Group