Public Service Commission reconsiders letting utilities bill customers during outages

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Photo - Della Stoloworth holds at sign that says "Numbers dont lie, Pepco does" at a meeting on the performance of Pepco's service following the storms that hit the Washington area on June 30, 2012. (Examiner file photo)
Della Stoloworth holds at sign that says "Numbers dont lie, Pepco does" at a meeting on the performance of Pepco's service following the storms that hit the Washington area on June 30, 2012. (Examiner file photo)
Local,Maryland,Rachel Baye

Maryland regulators are reconsidering their decision to let Pepco and other electric utilities bill customers for lost revenue during the first 24 hours of a power outage.

The state's Bill Stabilization Adjustment, or BSA, is intended to ensure that an electric company collects the revenue authorized by the Public Service Commission as a way to encourage companies to improve energy efficiency, even though that reduces usage. In months when customers use a lot of electricity -- like when it's hot outside -- they get a credit on their bills, but when they use less electricity, they pay a fee.

In the case of a "major storm outage" -- one that affects 10 percent of a company's Maryland customers or 100,000 people, whichever is less -- the BSA does not reimburse a company for lost revenue after the first 24 hours.

But after the June 29 derecho left hundreds of thousands of Maryland residents without power for days, many residents and some lawmakers complained that 24 hours' reimbursement is unfair.

"For the Public Service Commission to allow a utility to charge for electricity that you could have or should have used but didn't use is the same thing as allowing any gas station to charge any individual for a full tank of gas whether or not they got one because they could have gotten one or they should have gotten one," said Bethesda resident Ed Levien.

The problem with the BSA is that outages are a regular occurrence for Pepco customers, said Silver Spring resident Peter Miller. "There wouldn't be any issue regarding the 24-hour service rule if the service were in any way acceptable."

State Sen. Brian Frosh, D-Montgomery County, has said he hopes to get rid of the practice, though he could not be reached for comment Thursday.

The flood of complaints prompted the Maryland PSC to announce Thursday that it will reconsider its policy.

Montgomery County Council President Roger Berliner, a vocal critic of Pepco's performance, praised the decision.

"This is not so much about dollars as it is the principle that Pepco should share in the financial pain of outages," said Berliner, D-Bethesda. Montgomery County opposed the 24-hour "grace period" when the PSC was debating it last year, instead encouraging a policy similar to the District's, which credits customers during a power outage.

Baltimore Gas and Electric opposed the PSC's decision in January to limit the company's ability to recover revenue lost to an outage.

"If you have trash pickup that does not occur in a given week ... you don't get a rebate on your tax bill. You've already paid your bill," said BGE spokesman Robert Gould, pointing to the need to cover fixed costs.

Pepco declined to comment other than to say it will participate in the PSC's proceedings.

rbaye@washingtonexaminer.com

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Rachel Baye

Staff Writer - Education
The Washington Examiner