Last Friday was the first time in four years that we have had an emergency activation of BGE's PeakRewards program. We have had some non-emergency events with lower impact. The emergency electric load reduction, which was repeated across the region by other utilities to varying degrees, was taken at the direction of the PJM Interconnection, the regional transmission operator (power grid) serving Maryland and several other states. Emergency activations of the program have been infrequent in the past and are expected to remain infrequent in the future.
BGE recognizes the frustration experienced by some of our PeakRewards customers as a result of the emergency activation of the program on July 22. We appreciate the challenges faced by some customers who didn't have central air conditioning for an extended period of time on a very hot day. We also understand the frustration expressed by some who needed a better understanding of the program or had difficulty contacting us during this event. We are working to identify potential areas of improvement to ensure the program continues to successfully reduce peak electric demand and meet our customers' expectations.
It is important to remember that the PeakRewards program did its job. The program is designed, in part, to lower demand for electricity when we need it most. On July 22, when demand was extremely high and conditions on the electric system were challenging, the emergency activation of the program resulted in the reduction of peak energy demand of more than 600 megawatts, equivalent to a medium-sized power plant. Reducing demand improved system reliability and helped avoid potential brownouts and rolling blackouts — similar to what happened in other states — that could have interrupted electric service to all of BGE's 1.2 million electric customers throughout Central Maryland. The successful peak demand reduction was only possible because of the 450,000 BGE customers who participate in this voluntary program.
In addition to reducing demand, the PeakRewards program helps to defer the need for new and expensive power plants, which benefits the environment and helps lower the cost of electricity. Customers participating in the voluntary program also receive annual bill credits of up to $200 in the first year and up to $100 every year thereafter. Bill credits to participating BGE customers will exceed $20 million this year alone. These credits are paid to customers whether or not BGE ever needs to call on the customers to reduce usage.
We believe our PeakRewards program has tremendous value. We know some PeakRewards customers are frustrated with the program right now, and we appreciate the feedback we have received. We know we must do a better job communicating and working with customers before, during and after PeakRewards events occur. We are reviewing our processes and evaluating potential improvements. We look forward to our customers' continued support and participation in this important program.
Jeannette M. Mills, Baltimore
The writer is senior vice president and chief customer officer for BGE.