Holding power companies accountable

Maryland has some of the lowest electric customer satisfaction in the nation

March 29, 2011|By John Kelly

Marylanders live with an unnecessary burden of being among the lowest in electric customer satisfaction nationwide. A 2010 J.D. Power satisfaction study puts Pepco and Baltimore Gas & Electric tied for 104 out of 121 utilities nationwide in customer satisfaction.

Fortunately, the state finally has a chance to lead the effort in creating a more reliable electricity system.

The spring season makes it all too easy to forget the winter snowstorm that left more than 400,000 Maryland residents without power just a few short weeks ago. While Pepco took much of the heat, 237,000 of those who lost power during January's storm were BG&E customers, according to The Baltimore Sun. The good news: Outage outrage has oversight officials scrambling to expedite emergency legislative action that would hold the utilities accountable for enhanced reliability standards.

Both the state House and Senate have held hearings about the proposed Maryland Electricity Service Quality and Reliability Act, but there's no time to waste in getting this bill passed into law. As the summer approaches, power outages threaten to strike again — and soon. Last July and August, thunderstorms alone left about 323,000 people in the dark.

When I testified before the House Economic Matters Committee in support of the legislation, I made it clear that Maryland's legislators and regulators have a duty to ratepayers to develop and continuously improve upon reliability performance benchmarks. These reforms have the potential to improve the state's electricity reliability by ensuring utilities work toward higher power performance standards, which are already in place in 25 states and the European Union. If utilities fail to comply, the Maryland Public Service Commission would impose a fine.

These reliability improvement reforms are critical to building a more reliable, more efficient electricity system that will benefit residents and businesses alike, especially when we consider that interruptions nationwide cost our economy $150 billion a year.

Companies in Maryland know full well that even a brief outage can have a serious effect on the bottom line. One interruption is enough to crash servers, computers, intensive care and life support machines, automated equipment, and other microprocessor-based devices. Nationwide, outage costs alone for industrial and digital businesses add up to about $46 billion a year, according to an American Power Conversion report.

And prolonged power outages like those frequently experienced in Maryland can cause more than financial loss — they can mean the difference between life and death when people who are elderly or ill lose their heating and cooling or literally end up powerless to operate special medical equipment like dialysis machines. When the power goes out, police and firefighters are forced to abandon their neighborhood safety routines for the sake of emergency response. When the power fails, many residents turn to candles for light and generators for power — both of which pose very real health and safety hazards.

In an environment of cost recovery, with guaranteed rates of return instead of competition, utilities do not have the performance pressure that drives quality, efficiency and innovation in the private sector. The current lack of effective performance metrics and standards lets utilities operate without proper oversight.

Provisions in the Quality and Reliability Act would require utilities to submit annual reports with detailed information about service interruptions, including causes, duration of the interruptions, affected geographical regions, and steps taken to ensure power restoration and improvement. This information is critical for customers and public officials alike in working together to hold the state's utilities accountable for improved service.

We are slowly moving toward a system that goes even further in achieving a comprehensive set of benchmarks for safety, security and reliability; cost transparency; consumer empowerment; and efficiency and environmental protection. This is the norm in other industries where safety, productivity and other issues are critical. So now it is the utility companies' turn to measure up.

John Kelly is the deputy director of the Galvin Electricity Initiative. He has been a featured speaker on sustainable development, smart grids, utility restructuring, distributed energy technology and energy markets. His e-mail is jkelly@galvinpower.org.

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