BG&E Takes Its Smart Grid Case to Regulators

Baltimore Gas& Electric (BG&E), armed with a $200 million Smart Grid stimulus grant, took its case before the Maryland Public Service Commission (PSC) and outlined its plans to lower operating costs, help the environment and offer incentives to reduce demand.

 

But consumer advocates have consistently spoken out against the BG&E plan as too much too fast.

 

The BG&E proposal would combine smart meters with a new time-of-use price structure, said Mark D. Case, the utility's senior vice president for regulatory affairs. BG&E also is asking for authority to apply a surcharge on electric bills to help recover the cost of its project, which includes replacing two million meters by 2014. The new pricing structure would increase per kilowatt-hour charges during times of peak demand during hot summer weather.

 

The PSC must approve both the pricing plan and the project cost recovery surcharges. The commission is expected to continue the hearings throughout the week and make a decision by year's end.

 

The $200 million in federal stimulus cash will lower the surcharge and, as Case told commissioners, "It takes what already was a strong business case and makes it stronger."

 

BG&E says deployment of the smart meters, a key component in Smart Grid technologies, would provide several benefits: real-time information for consumers so they can better control their energy use, automated meter reading, service disconnections and reconnections and outage detection—all of which could result in savings for utility customers.

 

The utility argued unsuccessfully with the PSC to hold the hearings in August in advance of the October stimulus grant awards because officials felt it would strengthen their application to DOE for the money.

 

BG&E obviously didn't need to be concerned about getting the commission's blessings for its project before the grants were awarded, but they do have another problem: Consumer advocates don't like it and they aren't at all reluctant to say so.

 

"We view it as too much too fast," an advocate was quoted as saying in the Baltimore Sun. The speaker, Paula Carmody of the Office of the People's Counsel, said advocates question if the project is the best, most cost-effective way to cut costs. The project is expected to cost roughly $800 million over the lifespan of the meters.

 

Advocates also criticize the plan's variable pricing as potentially harmful for older adults, children and others who are home during the afternoon peak demand period. Other issues raised by critics are questions of meter security, privacy and the possibility of obsolescence because the technology is so new.

   Quick Take: The BG&E scenario is yet another excellent example of why utilities need to take their case to their customers and do a better job of explaining the benefits of their high-ticket proposals.

   Baltimore Sun news article

   Previous coverage from SGN

   Maryland Stimulus Toolkit