Revised BG&E Smart Grid Plan Gets Conditional Go-Ahead. But Will It Fly?
Aug 13, 2010
Baltimore Gas & Electric’s revamped stimulus-funded Smart Grid initiative, knocked down in an earlier Maryland PSC decision, got approval Friday with strings attached, according to a report in the Maryland Daily Record. The commission said the utility cannot assess an upfront surcharge to make customers help pay for the smart meter rollout. That’s a condition that BG&E won’t like – as the Daily Record reported, the utility had indicated it might scrap its proposal if the PSC rejected a surcharge. At stake: $200 million in Smart Grid stimulus money to help pay for the smart meter rollout in BG&E territory.
Quick Take: Stay tuned on this one; the PSC clearly left the ball in BG&E’s court.
This is a quote, of August 13th, from the Maryland Daily Record,“'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." The problem is that state regulations need to be revamp as soon as possible.
This is my comment under the Intelligent Utility commentary "Decision Time: Baltimore's Smart Meter Case," by Phil Carson:
Full Vetting of the Issues Inside the Box Misses Value Creation - Aug 12, 2010 - 11:19 AM When we look outside of the regulatory box, underlying all the distress signals of the BGE Smart Grid Initiave is a message that business-as-usual (BAS) is totally unacceptable.
"Win, lose or draw" is a losing proposition if it ignores the emergence of a vibrant high value creating retail market, with a regulatory process that is being overmanage under BAS, when it should be led to enable a Smart Grid transformation. In his article What Leaders Really Do, John Kotter says "They don't make plans; they don't solve problems; they don't even organize people. What leaders really do is prepare organizations for change and help them cope as they struggle through it."
José Antonio Vanderhorst-Silverio, Ph.D. - 08/14/2010 - 05:45
It Will Not Fly
The BGE Domino is Down - Aug 14, 2010 - 11:08 AM
On page 15 of ORDER NO. 83531, issued by the PUBLIC SERVICE COMMISSION OF MARYLAND, on the 13th day of August, 2010, I found that "BGE acknowledges, however, that the Company’s response was designed primarily to mitigate risks, rather than to allocate them. And, indeed, the Company does not believe it should share in the risk:”
On page 17 it adds that “… the Company expects full cost recovery, with no risks or contingencies, whether or not the benefits materialize. On page 45, it further adds “BGE expresses genuine enthusiasm throughout for the opportunities the “smart grid” offers for the Company and its customers, but continues to argue that the Company should not be expected to bear any of the risk that the costs to customers might fail to yield benefits… But BGE concedes, as it must, that the Company’s responses are designed primarily to mitigate the risks to customers, not to allocate them between the Company and its customers."
On page 47, we find the key response of the PSC “… one way or another, customers must achieve some level of supply-side benefits –perhaps only a fraction of what BGE projects – or they risk paying in full for something they have not received.”
The conclusion of the ORDER has denied BGE full recovery, as it states that "... at the time that the Company has delivered a cost-effective AMI system, the Company may seek cost recovery into base rates."
José Antonio Vanderhorst-Silverio, Ph.D. - 08/14/2010 - 17:06
BGE Proposal is the 1st Domino Knocked Down
This is in accordance with my Prediction #1: Recognizing the emerging global power industry in the complete context around the Intelligent Utility Inside article Baltimore G&E: AMI Comeback? and that of this EWPC article, the Maryland PSC “No so fast” decision on the BGE proposal is highly likely the 1st domino of the chain reaction that is going to start “knocking over the next” state regulator’s utility case, “which upsets the next one, and so on.” See the EWPC article Three Smart Grid Predictions for Initiating the Global Power Industry Transformation at http://bit.ly/EWPC27
José Antonio Vanderhorst-Silverio, Ph.D. - 08/14/2010 - 19:12
Electricity Without Price Controls?
Hi Jose. Thanks for the comprehensive commentary. The link to EnergyBlogs was new to me so thanks for that. Simple question about your point - is "Electricity Without Price Controls" where you are going?
We're getting mixed signals about the vitality of the smart grid market. On the one hand, the recent DistribuTECH conference was one of the most successful ever. On the other, a well-known Wall Street analyst recently told his clients that the smart metering sector is "facing several headwinds," including weak regulatory support in the U.S. and delays in European adoption. Taking the pulse of the smart grid industry is this week's Tuesday Topic.
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