State regulators discuss reliability standards for utilities

March 24, 2011|By Liz F. Kay, The Baltimore Sun

State utility regulators voted Thursday to form a working group to hash out details of new rules setting standards to help ensure reliable service after customer complaints of lengthy power outages during both storms and fair weather.

"The overarching goal is to establish objective expectations for high-quality service," said Douglas Nazarian, chairman of the Maryland Public Service Commission, during a hearing in Baltimore.

Utility officials cautioned that the regulations — which include guidelines for tree trimming, repairing downed wires and customer service — could cause customer bills to soar. But consumer advocates said that customers, including those who rely on electricity for business and to power medical equipment, needed better service.

Commissioners opened the regulatory matter after an investigation into outages endured by Pepco customers in winter and summer storms last year, particularly in Montgomery County. But commissioners and others who testified Thursday said that other utilities needed to improve service as well.

The work group was charged with developing standards to measure utility performance in all conditions. It was asked to consider how much it would cost utilities to implement the standards. The commissioners stipulated that the work group should not decide how the utilities could recoup those costs from ratepayers.

The group was also told to develop quality standards for customer communication, recommendations for operations and maintenance, and penalties for utilities not meeting the proposed requirements.

The General Assembly is debating an O'Malley administration proposal that would specify language for the regulations. For example, the bill would ensure that any penalties incurred by utilities could not be passed on to ratepayers through higher bills.

Chris Burton, BGE's senior vice president for gas and electric operations and planning, and other company officials told the commission that the utility supports "reasonable, balanced regulation" but cautioned that some provisions, including tree-trimming requirements, run the "risk of increasing costs without a corresponding increase of reliability."

Rawle Andrews Jr., senior state director of AARP Maryland, testified that the state's senior citizens, some of whom rely on power to refrigerate medication and to power life-saving machines, would benefit from statewide utility reliability standards. He said the standards should be different for good weather and during storms.

Burton said he believes the standards should be tailored to individual utilities because each contends with differences in geography, weather and population density.

The proposed language states that violations of the regulations would be subject to civil penalties. But Montgomery County Council Vice President Roger Berliner told the commissioners that utilities should get a lower rate of return on their investment, which is set by the PSC, if they don't meet reliability standards.

"This is what they are in the business of doing — delivering power, of having good customer service. If they don't do this well, they should not earn their authorized rate of return," he said.

For the year that ended in February, customers submitted 277 complaints about Pepco's service reliability and 79 complaints about BGE, according to PSC staff.

The commission also voted to consider, in a separate rule-making procedure, a request from the parents of Deanna Green to guard against "contact voltage." Deanna, 14, was electrocuted in 2006 when she touched two fences that had become electrified at a Druid Hill Park ball field. The fences were touching an underground wire.

The proposed rule, based on rules already in place in New York, calls for regular sweeps to find electrified objects, as well as follow-up repairs and maintenance.

Deanna's mother, Nancy, said after her testimony that she felt the response from commissioners was positive. "We did not want them to delay this rule and further jeopardize the safety of pedestrians," she said.

liz.kay@baltsun.com

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