State senators call for fining utilities for power outages

Two members of the state senate are taking on local utility companies in a big way by demanding that Pepco and Baltimore Gas and Electric come up with a plan within 60 days to respond quickly to power outages following major storms.

They hope that plan will include putting many more power lines underground and increasing the number of trained line crews available to restore power following a major event.


In a letter sent last week to the Public Service Commission, the regulatory authority for the power companies, the local elected officials asked the PSC to fine the two utilities $100 million each, as a way of penalizing them for the 1 million people who lost power during the June 29 derecho storm.

Hundreds of thousands of area residents were without electricity for several days after the storm, some for as long as a week. The power outages came at a time when area temperatures soared to triple digits.


Many residents lost large amounts of food, to the tune of more than $100 million region-wide. In addition, numerous businesses were not able to operate and cellular and landline telephone service was lost throughout the area, including 911 service in some parts of Virginia.

"Hundreds of millions of dollars in damage was done to the area's economy, so to ask for a $100 million fine for each utility isn't close to the damage the power failure cost," said District 21 Sen. James Rosapepe, who represents Laurel. "They (the utility companies) underestimate how the 21st-century economy relies on electricity. They're operating with a 1950s mentality, when there were no smart phones and people weren't working out of their homes (and being) affected by not having power."

The PSC has the authority of fining utilities $25,000 per customer for each day they did not have power. According to Rosapepe, a total of 3 million days of customer power service was lost during the outages after the storm.

District 16 Sen. Brian Frosh of Montgomery County cosigned the letter to the PSC. He said the electric companies should be given much more than the $1 million fine the commission leveled against Pepco last year for poor maintenance of its system over the past several years. He described that fine as a mere slap on the wrist.

"They touted that fine as the biggest fine in their history and that's a sad fact because that doesn't begin to equal what it should have been," said Frosh, who added that his neighborhood in Chevy Chase lost power for five days. "The utility companies make hundreds of millions of dollars in profits and a 1-million-dollar fine is pocket change to them. They probably spend more than that on lobbyists. The PSC has to think of bigger fines if they want to get the utilities to provide better service."

BGE: Fine request premature

The senators say they have not received a response from the PSC. In the meantime, they have launched an online petition campaign to get residents to join their cause to push for fines for both Pepco and BGE.

BGE spokesman Rob Gould said it's premature for the legislators to call for fines at this point, considering that the PSC has not completed its assessment of the utilities' response to the storm.

"That full review process needs to take place, and I believe it will show that we restored power as quickly as possible," Gould said. "We had to do things like rebuild an entire feeder line in Pikesville. I'd say we've made definite improvements in completing full storage since (Hurricane) Irene, with the same number (of outages)."

A Pepco spokesperson would only say they are still reviewing the PSC letter in detail. In a statement released last week, Pepco officials defended their response to the late-June storm by saying they have more than 500 permanent and contract crews available to restore power losses during and after major storms. They stated this is the largest number of line crews they have had in the company's history.

But that number is still a problem for Rosapepe and Frosh. They described the utility companies' normal response to major outages — bringing in employees for overtime and outside contractors — as outdated.

They both say the utilities should have a reserve of trained crews that number in the thousands. They proposed that the fines collected from the utilities could be used to train up to 15,000 people so power can be restored more quickly. The legislators pointed to the how volunteers are used successfully in local fire departments and the National Guard as examples of how their idea can work and suggested that retired utility employees and independent electricians be included in the mix.

Frosh said that in addition to training volunteers, some of the money could be used to move power lines underground.

Gould said they are not opposed to having a public discussion with all stakeholders on the feasibility of putting more power lines underground, which he says is a two-sided issue.

"There are benefits to putting lines underground, but there are costs associated with it, too. Also, underground lines do go down and repairing overhead lines is a quicker process where you don't have to dig to find out where the problem lies," Gould said.

Frosh and Rosapepe listed the 1999 deregulation of the utilities, which they opposed, as a major culprit in terms of the power companies not doing a better job of maintaining and upgrading their equipment.

"After deregulation, they started neglecting their infrastructure and they let the number of maintenance workers dwindle, as electric service expanded dramatically," Frosh said.

Rosapepe agreed and added, "Deregulation created incentives for utility executives to play more like Wall Street and focus on dividends instead of being an electric service provider."

Equipment upgrade

In defending their companies, utility executives are quick to remind the public that the recent storm was not expected and caught everyone off guard. But Rosapepe said other cities worldwide have more severe weather-related events than this area, but do not have the extended power outages experienced here. He thinks the problem lies with local utilities not upgrading their equipment to handle the climate changes that have occurred in recent years.

"Clearly the companies here are living in the past and act as though climate change is not happening; that they are surprised by derecho, (Hurricane) Irene. That's not a legitimate excuse," Rosapepe said. "More events are coming. If the PSC recognizes that reality, that we all know, they will have to impose fines."

PSC officials are not saying how they will weigh in on the fines and did not return calls regarding the issue at press time.

Although they had no firm numbers, 21st delegation members and Frosh say their on-line petition in support of the fines is gaining support, which they hope will get the attention of PSC members.


"I hope the PSC's eyes will be opened," Frosh said. "I wouldn't say they're in the pocket of the utilities, but I'm not in their offices daily, my neighbors are not, but the utility lobbyists are and they listen to them."

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