Property damage by utilities aggravates customers

Brie Daugherty doesn't object to the Baltimore Gas and Electric Co. replacing a gas line in her Arbutus neighborhood.

It's the flooded basement — courtesy of a sewer line broken by a BGE contractor — that bothers her.


"Obviously the infrastructure needs to be replaced, I'm not doubting that," she said. "And I have no problem helping to pay for it. I do have a problem helping to pay for that when my house is damaged and it's like pulling nails to get it fixed."

She's not the only aggravated utility customer. Since 2010, about 400 Marylanders have complained to state regulators about property damage they said was caused by utilities companies or their contractors — from cracked driveways to torn-up lawns to fried appliances.


The opportunities for accidental damage are mounting as Maryland electric and gas utilities pick up the pace of replacing aging infrastructure. For example, BGE said it wants to increase its annual gas-system construction and maintenance spending by 250 percent over the next several years.

But while utilities can ask the Maryland Public Service Commission for the right to pass their costs on to customers, customers with property damage can't get the agency to order up a reimbursement check.

Utilities or their contractors might independently fix such problems — BGE, for example, says it makes a payment or sends out a work crew in a high portion of claims about damage it directly caused. But the only outside party that can order the companies to pay is the court system, said Obi Linton, who heads the commission's office of external relations.

"We don't have the authority to do that," he said. "As a general matter, if you're looking for money, there's not much we can do to help."

What the commission can — and must — do is forward all complaints to the utilities, which are required to respond. Sometimes that makes the difference in a dispute.

David Rohrs said Verizon left a bare strip of ground near his front yard after installing fiber-optic cable in his Perry Hall neighborhood, and his efforts to get the company to fix it were going nowhere. He said he called and called, and even went to Verizon's offices in Hunt Valley.

Finally, he complained to the Public Service Commission in April. Verizon insisted it wasn't the cause of the bare patch, the complaint record shows. But company officials sent a contractor out the next week to put in top soil and grass seed.

"It probably took the guy less than five minutes to do the work," said Rohrs, who runs an online advertising and marketing firm. "I don't know why they couldn't fix it until the Public Service Commission got involved."


Verizon spokeswoman Sandy Arnette said she couldn't speak to "the alleged delay in responding" because the company has no record of Rohrs' calls before he complained to regulators. The contractor that replanted the grass thought the bare patch was caused by fluid leaking from a car, she said.

When people call with damage claims, "we make every effort to reach a timely resolution," Arnette wrote in an email.

While utilities are required to respond to formal complaints, fixing damage isn't mandatory. In some cases — when appliances or electronics die in a power surge, for instance — customers are unlikely to get satisfaction. BGE isn't liable for losses caused by surges or outages except in cases of "willful default or neglect," a rule the company says is typical across the country.

David Miller of Phoenix said he found that hurdle a high one when he took BGE to small-claims court this year. He sued for reimbursement over a February surge he says damaged $3,300 in lighting controls, breakers, surge protectors and other electrical equipment in his Baltimore County home.

Miller, an electrical contractor, thought he could make a case for gross negligence. He said he'd called BGE the week before when the area had four momentary outages, and said he saw no evidence that the utility came out to check the equipment.

But the judge, while sympathetic, said he had no choice but to rule in favor of BGE, Miller said.


BGE declined to comment about his case but said it doesn't reimburse for surge damage, deferring to state utility rules and legal precedent.

Miller thinks there ought to be a state-mandated fund for utility damage, much like the EmPOWER Maryland fund that customers can tap for energy-efficiency work. His wasn't the only home affected by the February power surge, he said, and he's lost electronics to two other surges over the years. He filed a claim with his insurance company after the second incident — and his insurer raised his rates.

The utility surge rules don't strike him as fair.

"The laws are written in such a way to protect the companies," Miller said.

The state has characterized the rules as protecting customers — in the broad sense.

The Public Service Commission concluded in 1991 that limiting liability for power surges and outages was in the public interest, agreeing with a public utility law judge who wrote that it reduced "potential costs to all ratepayers, including potentially catastrophic costs which may result from future outages or other fluctuations in service."


Baltimore, meanwhile, warned its water customers in November that they — and not the city or its contractor — would be on the hook if pipes on their property are damaged when new wireless meters are installed. City officials suggested homeowners who are among the 400,000 customers in Baltimore and Baltimore County buy insurance costing about $5 a month.

"It's like another tax," City Comptroller Joan M. Pratt complained at the time.

BGE has by far the most damage complaints to regulators among investor-owned electric utilities — 133 of the 400 since 2010. But BGE's level of complaints are on par with Pepco's, considering the Washington-area utility's smaller customer base.

Pepco said it was not able to answer questions about property damage complaints.

Damage, of course, runs both ways. BGE recorded 764 cases of damage to its underground equipment caused by third parties this year, said spokeswoman Rachael Lighty. The above-ground system takes a hit, too, such as cars running into utility poles.

In cases where BGE or its contractors are at fault, most complaints don't end up with regulators. The company — which has about 1.2 million customers — said it processed 604 damage claims this year through October, a little more than half of which were referred to contractors.


Of the 281 claims involving BGE directly, 276 ended with a payment or a work crew making a fix, Lighty said. Last year, BGE sent a crew or made a payment for 153 of the 222 claims directly involving the company.

When claims aren't resolved with a payment or another fix, it's because BGE investigators decided the company wasn't at fault, she said.

But those claims don't include complaints about surge damage, which aren't reimbursed.

Many of the claims BGE resolved early this year came in after the remnants of Hurricane Sandy hit last fall, Lighty said, and involved such incidents as utility workers driving across lawns to get to equipment in back lots.

"We investigate each and every claim to verify the validity of it and also the party that's responsible," Lighty said. "We will work with customers to rectify any damage that may have been caused inadvertently by BGE crews."

If a BGE contractor caused the damage, it is liable and customers must deal directly with that company, she added.


Daugherty, whose finished basement was damaged by a BGE contractor in June, is still waiting for closure.

The work itself was finished in late October. She had to bring in three firms to remediate the mold, repaint the walls and replace the carpet, vinyl flooring, drywall, cabinet and other damaged items. The total cost was $11,000, she said. But the insurer for BGE contractor Henkels & McCoy said $4,700 was all it would pay, Daugherty said.

She didn't want to involve her own insurance company, mindful that a claim could increase her premium. But she couldn't get Henkels' insurer to budge and found that a lawsuit would cost her several thousand dollars in attorneys' fees, so she saw no alternative. Her insurer, which approved the repair cost, will try to recover it from Henkels' insurer.

"It's been such a nightmare," said Daugherty, an accountant, as she sorted through her records of the case.

Bob Moore, Henkels' operations vice president for the East region, said the company defers to its insurer about how much money it should take to repair damage. But he said he's confident the problem will be worked out.

Property-damage cases don't come up frequently, he added. When they do, he said, "we take these things very seriously."


"They're the customers of our customer, and we want to make sure if we've damaged something that we repair it and make it right for them," Moore said.

In Daugherty's case, Moore says, crews were drilling in the area and believe the sewer line wasn't where the records showed it should have been. He said Henkels quickly brought in a cleaning company after her basement flooded — water backed up and gushed in when she ran her washing machine and took a shower.

Daugherty said she has no complaint with the immediate response. What came after was the problem, she said. And she's not happy that BGE left her on her own to deal with it.

She wants utilities and their contractors to be very careful as they push on with infrastructure work.

"I don't want someone else to have to go through this," she said.