Smart metering took a one-two punch this week, one blow on each side of the country.
First, Baltimore Gas and Electric (BGE) was told by the Maryland Public Service Commission (PSC) that its application to deploy smart meters to its 1.2 million customers was being denied. “In this Order,” PSC commissioners wrote, “we deny Baltimore Gas and Electric Company’s Application for Authorization to Deploy a Smart Grid Initiative and to Establish a Surcharge Mechanism for the Recovery of Costs (the ‘Proposal’). Although we share BGE’s (and others’) hopes, and even enthusiasm, for the long-run potential and importance of the infrastructure upgrades known colloquially as the ‘smart grid,’ we find the business case for this Proposal untenable.
“The Proposal asks BGE’s ratepayers to take significant financial and technological risks and adapt to categorical changes in rate design, all in exchange for savings that are largely indirect, highly contingent and a long way off. We are not persuaded that this bargain is cost-effective or serves the public interest, at least not in its current form. But we invite BGE to revisit its Proposal in light of this Order and to submit an alternative that addresses the issues we discuss below.”
The proposal was initially filed with the PSC on July 13, 2009. In October 2009, the U.S. Department of Energy awarded BGE a $200 million Smart Grid Investment Grant for the nearly $452 million project. BGE had planned to deploy a smart meter network and advanced customer control system that would enable dynamic electricity pricing for its entire customer base. It also planned to expand the utility’s direct load control program to enhance grid reliability and improve congestion.
BGE officials were clearly flummoxed by the decision. A statement issued by the utility on June 21 said: "BGE is deeply disappointed, frustrated, and frankly surprised by the Maryland Public Service Commission's (PSC) decision to deny our application to deploy advanced energy meters to each of our 1.2 million customers and save them $2.6 billion."
The company noted the Obama Administration's wholehearted endorsement of BGE's initiative (as evidenced by the $200 million smart grid grant it awarded the utility), and added, "We're shocked that the PSC is jeopardizing the $200 million stimulus grant awarded by the Department of Energy to help pay for the initiative. The decision also jeopardizes Maryland's ability to meet the O'Malley Administration's energy efficiency goals under EmPOWER Maryland."
Whether BGE feels it can revamp its proposal for resubmission to the PSC is still unknown. The fate of the $200 million DOE grant it received is also unknown, though Matt Rogers, senior advisor to the U.S. secretary of energy for Recovery Act implementation, has said in a statement issued earlier this week that DOE officials plan to work with BGE to move forward.
Closely on the heels of the Maryland PSC’s decision, news came that San Francisco City Attorney Dennis Herrera late last week filed a formal petition with the California Public Utilities Commission asking it to stop Pacific Gas & Electric Co. from continuing to install its smart meters pending completion of an official inquiry into the meters’ accuracy. (The PUC’s inquiry is expected to be completed later this summer.)
This is but the latest salvo in the pushback PG&E is experiencing this year, about two-thirds of the way through its installation of gas and electric smart meters across its California territory, which it began in 2006.
Clearly, the consumer education piece of the smart grid equation needs revisiting.
I look forward to your comments here, or via e-mail at krowland@energycentral.com. Follow me on Twitter: www.twitter.com/katerowland2
Posted At : June 8, 2010 9:26 AM
| Posted By : Kate Rowland
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