Bge Meter Plan Meets Opposition

July 28, 2009|By Liz F. Kay | Liz F. Kay,liz.kay@baltsun.com

Consumer and senior advocates oppose Baltimore Gas and Electric Co.'s request for an expedited review by state regulators of the company's smart grid proposal, rather than a full hearing.

If the plan were approved, all BGE customers would get "smart meters" that create a two-way communication network that gives users hour-by-hour data about their energy use. The utility would pay rebates to those who conserve when energy demand is highest. It would also save millions by automating meter readings as well as service disconnection and reconnection.

BGE argued in the 450-page filing to the Maryland Public Service Commission that a legislative-style hearing in August would let the company meet the October deadline to apply for federal stimulus grants for smart grid improvements that would lower the $500 million cost of the program, which would be recovered through customer surcharges. BGE says that consumers could save billions over the 15-year life of the meters by reducing consumption during "critical peak" periods.

AARP Maryland filed its letter of opposition to the fast-track process on Monday. The state's Office of the People's Counsel, which represents consumers, as well as staff for the five-person commission have also recommended that commissioners hold a full hearing.

"The problem is what's not in the filing," said AARP Maryland's advocacy director, Hank Greenberg. "There are a lot of questions that need to be answered."

Only with an evidentiary hearing, with sworn witnesses and testimony by experts, would the public be "able to substantiate whether there are savings and whether some of the claims in the filing can be verified and backed up," he said.

In its letter, AARP also raises concerns about a "time-of-use" pricing scheme also included in BGE's filing. The utility proposed charging about 16 cents per kilowatt-hour from 2 p.m. to 7 p.m. weekdays from June through September and 10 cents for other times during that period.

Mark Case, BGE's senior vice president for strategy and regulatory affairs, said the company included time-of-use rates in its filing, but it's not critical. "That's to me a very optional part of our proposal," he said. "The biggest piece of smart grid and smart energy pricing is the rebate approach."

Some experts question BGE's predictions of how much customers will save. Reductions in energy use erode over time after an "initial euphoria of savings" shown in pilot projects, said Efran Ibrahim, a technology executive with the nonprofit Electric Power Research Institute.

Richard Bingham, a contributing editor for Electrical Contractor magazine, said people have failed to adopt other energy conservation methods that would also save money, such as buying more fuel-efficient cars. Most people aren't home to turn off their appliances at 2 p.m., and others might not postpone cooking or watching television until after 9 p.m.

"I'm not against smart metering," Bingham said. "What I don't want to do is create a false expectation."

During a pilot project conducted from June to September last year, a majority of customers cut back, Case said, running the washing machine or dishwasher after hours, for example. Outside those high-demand periods, customers saved 0.5 percent outside the critical periods during the pilot last year, Case said. The BGE proposal estimates a 1 percent reduction year-round.

Shirley Norlem, 72, said she saved more than $180 during the pilot program last year - about $15 a day during 12 critical peak days from June to the end of September. She and her husband, both retired, live in a detached Annapolis home without central air conditioning.

BGE sent telephone messages and e-mails to alert the couple of "critical peak period" days. They also gave them an orb that glows green but switches to red when critical peak hours are predicted. Norlem would then shut off the ice maker on her refrigerator, her computer, basement dehumidifer and hot water heater.

"I didn't want to unplug anything where I had to reset the clocks," she said.

At EPRI, researchers are looking at how long customers sustain those behaviors. Ibrahim predicts most of the real savings will stem from the utility automating its tasks.

Case isn't worried about erosion of savings. The company has continued the pilot this year and consumers have still saved on four critical-peak days, he said. E-mails and letters informing consumers how much they are saving has extended and reinforced their interest, he said.

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