By Scott Dance, The Baltimore Sun
6:43 PM EDT, August 9, 2012
Angry utility customers have spurred regulators to reconsider whether Baltimore Gas and Electric Co. and its peers can levy small charges to recover lost revenue during the first 24 hours of widespread power outages like those following the June 29 derecho storm.
On Thursday, the Maryland Public Service Commission scheduled a hearing for Sept. 24 to discuss a billing mechanism that utilities use to collect only the revenue authorized by the regulatory body.
The review will come nine months after the PSC revised the policy because it allowed utilities to charge customers throughout extended outages. In January, the policy was changed to restrict the charge to the first 24 hours after major storms hit, but even that riled customers after the derecho caused power outages that lasted as long as a week.
"We've had a lot of expressions of concern about the grace period, and it's a good idea for them to be looking at it," said Hank Greenberg, state director for AARP Maryland.
BGE began applying the policy to customer bills, with permission from regulators, in 2008 as a means to make up for revenue lost to energy-efficiency initiatives. It was introduced after the commission adopted what is known as revenue decoupling, a plan that ensures utilities don't lose revenue when customers use less electricity.
In some months, it's a charge; in others, it's a credit, depending on whether BGE has received more or less from customers than what it needs to properly maintain the grid. After the derecho outages, BGE officials said it would likely be a charge of less than $1.
BGE spokesman Rob Gould said the utility supports the commission's decision to reconsider the policy.
"The order earlier this year was trying to strike a balance between ensuring the financial strength of the utilities while at the same time not harming customers unnecessarily," Gould said. "It's within their purview to review this again, if that's their choice."
Before the policy was revised in January, BGE officials protested the change, arguing it would unfairly penalize the utility because it has no control over storms. The utility told the PSC it incurred $23 million in average annual expenses to restore customer service after weather events between 2008 and 2010, but recovered only an annual average of $308,000 through the billing mechanism.
Some customers don't see the policy as fair. Cathy Eshmont, organizer of Howard County-based advocacy group Reliability4HOCO, questioned the charge and the idea of revenue decoupling.
"Why would they ever fix anything to make it reliable if they can count on getting money anyway?" Eshmont said. "This is a billion-dollar company. They're not struggling."
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