Office of People's Counsel seeks assurances for BGE's low-income customers

Wants Exelon to fund assistance, weatherization, efficiency programs

  • Mamie Lewis received a new energy efficient gas furnace through a program funded by Constellation Energy Group.
Mamie Lewis received a new energy efficient gas furnace through… (Lloyd Fox, Baltimore Sun )
January 02, 2012|By Hanah Cho, The Baltimore Sun

As the economy has faltered over the past three years, more BGE customers have been in danger of losing their electric service because of overdue bills.

Now, as BGE parent Constellation Energy Group seeks to sell itself to Exelon Corp., the state's advocate for residential customers fears that the proposed merger would hurt low-income customers' ability to receive payment assistance and other help.

The Maryland Office of People's Counsel says the deal would lead to a consolidation of customer services that could cause the utility to become less responsive to the concerns of Baltimore Gas and Electric Co. ratepayers.

Chicago-based Exelon rejects that argument, saying BGE would remain as a separate, locally managed company and would maintain its commitment to serving low-income customers.

People's Counsel Paula Carmody remains skeptical.

"Exelon is going to be looking to run BGE as part of its bigger business," Carmody said in an interview. "They're looking to standardize procedures, consistent with PECO and ComEd" — Exelon's utilities in Philadelphia and Chicago.

"This can have a detrimental impact for all of our customers," Carmody said, "but particularly low-income customers who are at the margin, most vulnerable and are most in need of personal attention."

The Office of People's Counsel fears that the consolidation of BGE's information systems would take away some of the discretion that the local utility's customer service representatives now have when dealing with past-due bills and initiating collection efforts.

"As you standardize these things and perhaps change the rules for how you determine, for example, who gets an alternative payment plan, this could translate into a negative impact for the low-income customers who are most in need of assistance," Carmody said.

Over the past three years, BGE has seen a growing number of customers in arrears — that is, three to five days' late on payments.

Last year, there were 339,310 low-income accounts in arrears, compared with 245,976 in 2008, according to BGE. The past-due amount on those accounts increased during the same period to $317 million, from $200 million.

More low-income BGE customers who received termination notices had their power disconnected last year than in 2008, according to an outside expert hired by the Office of People's Counsel to examine the merger's impact on low-income customers. The OPC contends that the proposed merger would exacerbate the problems and result in disconnection for more low-income customers.

Exelon spokeswoman Judith Rader said in a statement that the company's utilities in Chicago and Philadelphia are "strongly committed to supporting their low-income customers and seniors."

Rader pointed to assistance programs that PECO and ComEd provide for low-income customers. PECO, for example, offers discounted rates, energy-efficiency and weatherization assistance, and direct grants to low-income customers.

"In addition, both ComEd and PECO customer service representatives make payment arrangements with customers who are having trouble paying their bills, and that approach would continue at BGE as well," Rader said in the statement. "ComEd and PECO offer a variety of payment options, including deferred payments, installment payments and extended due dates, and do all they can to work with customers to avoid disconnection, which is always the last resort."

Among the recommendations the Office of People's Counsel has made to make the proposed merger more acceptable are several that it says would mitigate the risks to low-income customers.

The office has proposed that Exelon make a $34 million contribution over several years to programs that would provide financial help for low-income customers. It has suggested Exelon provide another $18 million over five years to help low-income families make their homes more energy efficient.

One of the programs the OPC wants to see bolstered is the BGE Heating System Fund, which began in 2009 with a $1 million contribution from Constellation to help fix or replace aging furnaces for low-income Baltimore homeowners over three years.

The OPC wants Exelon to make a five-year $4 million contribution to continue the heating system fund, which is held by the Baltimore Community Foundation.

The program has replaced furnaces at 28 homes. It was expanded recently to allow for the funding of other projects, such as roof repairs and replacement, said Ken Strong, assistant commissioner of the Baltimore Housing Department's division of green, healthy and sustainable homes.

As a result, nine homes have received roof repairs. Many more furnace and roof projects are in the pipeline, Strong said.

Baltimore homeowner Mamie Lewis received funding for a new roof in November. A furnace that was found to have a cracked heat exchanger was replaced with a new energy-efficient gas unit.

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