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State, county, BGE talk about storm costs

The rain, snow and wind from storms bring with them a cost to Maryland governments and utility companies.

Every year, millions of dollars are set aside to deal with blizzards, rainstorms and other natural disasters that upset the balance of daily life. Carroll County government put $1.8 million into its storm emergencies fund for fiscal year 2013 while the State Highway Administration has budgeted $41 million for snow removal during the 2012-13 winter.

Baltimore Gas and Electric, on the other hand, adds the money it spends to restore power during emergency situations to its operational costs. No matter the cost to governments and utility companies, the number one priority is getting the power back on.

When massive amounts of rain and snow hit Carroll, the Carroll County Department of Public Works is called in. Depending on the severity of the storm, drivers plow snow and block off flooded roadways for hours. Those extra overtime hours can add up.

Carroll County government sets aside money every year to fund overtime pay and materials to deal with emergencies, mostly snow and rainstorms, according to Ted Zaleski, director of the county's Department of Management and Budget.

The county's financial experts use past experiences to budget how much money the county will need for emergency weather events, according to Tom Rio, director of public works. Rio described the budgeting process as a "shot in the dark based on experience."

Even with the best analysis, Rio said Mother Nature can create a storm that forces the county to spend more than it budgeted. In those cases, such as the 2009 and 2010 snowstorms, the county must use reserve money to pay for worker overtime, he said.

"At that point, we spend what we have to spend to get the job done," Rio said. "We've never said 'stop' because we've run out of money. We always have an idea of the way we want the roads [to be cleared], how quickly we want the roads [to be cleared] and that's what we work towards."

The Carroll County Board of Commissioners must approve a request to move money from the reserve for contingencies fund into the storm emergencies fund, Zaleski said. The county's financial experts do keep track of how much money is being spent on storms throughout the year, to ensure the county will have enough money to cover costs.

"We don't know it minute-to-minute but at some point after the storm is finished we do have an accounting of how much we spent," Zaleski said.

It cost roughly $850,000 for Carroll County to manage Superstorm Sandy, according to James Weed, county emergency management coordinator. This figure combines the money that the federal, state, county, municipal governments, private businesses, agencies, nonprofits and other entities will spend, said Marianne Souders, emergency management planner.

Because Sandy was a presidentially declared emergency and the county met the pre-determined monetary figure, it will be eligible for reimbursement from the Federal Emergency Management Agency, Souders. FEMA will step in and pay no less than 75 percent of the eligible expenses back, Souders said.

However, it takes time for the request to be processed, and it'll be up to a year before the county sees any such funds.

"Put it into perspective of what we had," Souders said. "It cost a lot of money for not too many problems."

The SHA has 360,000 tons of salt at its disposal to treat the more than 17,000 miles of lanes it maintains. The SHA has 2,700 potential employees that can be utilized for snow, many of which are contractors brought in to assist full-time personnel with treating roads and snow removal.

If the state goes over budget, snow removal will continue as necessary. When the SHA has gone over budget in past years, including after the record-breaking snow totals produced during the winter of 2009-10, other maintenance projects have been cut or delayed, according to SHA spokesman Charlie Gischlar.

Any overtime paid to employees is included in the budget. Crews work until the roads are safe.

"We're never going to stop clearing snow," Gischlar said.

When the snow is cleared following a major storm, it is the electric utility companies' primary responsibility to get power restored.

Restoring power depends on the kind of storm, and the extent of the power outages, according to Rob Gould, a representative for BGE.

This year had two very different kinds of storms. The derecho, a windstorm which produced fast-paced violent thunderstorms, whipped through Maryland in late June, leaving many without power for upward of seven days. Since the company knew Superstorm Sandy was coming, BGE had more time to prepare, which resulted in fewer outages.

"You don't plan for two major storms like this in a given year," Gould said.

Electric utility companies are required to submit an outage report following a major outage event, which is defined as an event with more than 10 percent of the customers, or 100,000 customers, whichever is less, according to Regina Davis, with the Public Service Commission.

Utility companies submit a cost report, and the PSC will review the reports, receive public comment, and issue an order or fine.

The outage report details the methodology an electric utility company used in order to restore power in a timely manner, and how they could improve. The reports typically do not include cost however several electric utility companies were requested to submit the revenue it lost following the derecho.

BGE lost a total of $1,899,834 in revenue during the week-long outage due to the derecho, according to records submitted to the PSC.

Gould said BGE does not budget for emergency situations, but instead adds it into operational costs. BGE is part of two mutual assistance networks, where utility companies work together to travel to different areas to help get people back online.

"We basically pick up the tab for that utility crew for the period of time they're with us," Gould said.

Mutual assistance networks vary depending on the contractor, said BGE media spokesperson, Rachael Lighty. Because there is not a flat fee BGE pays throughout the year, the company pays for mutual assistance as needed, Lighty said.

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