Baltimore Gas and Electric Company (BGE) has filed an application for a rehearing of its amended smart grid proposal with the Maryland Public Service Commission (PSC).
BGE’s proposal, which last October was selected by the U.S. Department of Energy (DOE) as one of only six nationwide to receive a maximum $200 million stimulus grant, includes plans for the installation of 2 million smart meters.
BGE says it will save customers in excess of $2.6 billion over 15 years, far exceeding project implementation costs. However, on June 21, the PSC rejected the plan, saying it opposed the creation of a surcharge to help cover the cost of the program. Some analysts said the decision could represent an emerging trend among state commissions that could stand in the way of smart grid deployments nationwide.
The PSC said long-term ratepayer benefits did not seem to correspond with short-term rate hikes, but commissioners indicated they would consider a revised proposal.
According to BGE, the cost for smart grid–roughly 30 cents per month on average over the life of the project–is a small fraction of the expected customer savings of nearly $100 per year.
BGE modified its so-called "tracker" proposal for recovering its investment costs and has now proposed a hybrid approach that they say would give the PSC multiple opportunities to provide appropriate oversight and avoid future spikes in base rates associated with smart grid implementation.
Kenneth W. DeFontes, president and CEO of BGE, said “In today’s
filing, we address some misunderstandings about our proposal, respond to
the PSC’s concerns, strengthen what was an already robust plan, and
make every effort to retain a coveted $200 million grant from the DOE,
which would cut in half the overall costs of our smart grid project for
BGE’s residential customers.”
BGE said if the PSC does not act favorably on BGE’s smart grid proposal by July 30, they will lose the DOE grant.
BGE has withdrawn a mandatory time-of-use (TOU) rate structure, replacing it with an optional TOU program that charges variable rates during peak and off-peak hours. Under the plan, all customers would be automatically eligible to earn rebates for conserving energy during periods of peak demand.
BGE’s new filing also provides a comprehensive customer-focused education and outreach plan. BGE customers reported above 90% satisfaction during two years of a pilot program and saved, on average, more than $100 a year.
In response to questions about the state of smart grid technology, BGE’s filing states that to date, 26 utilities in 15 states have installed more than 16 million smart meters, a number projected to double by the end of next year.
BGE said failure to implement a smart grid jeopardizes Maryland’s ability to meet the O’Malley Administration’s energy-efficiency goals–a 15% reduction in energy usage by 2015. As a result, customers will be put in the position of having to pay for more expensive sources of energy to meet growing demand.
BGE said implementation of the smart grid program will create an estimated 350 direct cleantech jobs and more than 1,300 indirect jobs.
BGE is a subsidiary of Constellation Energy (NYSE: CEG)
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“BGE said failure to implement a smart grid jeopardizes Maryland’s ability to meet the O’Malley Administration’s energy-efficiency goals–a 15% reduction in energy usage by 2015”
A smart grid will not reduces energy usage in anyway. It however may make consumers more knowledgeable about energy use and therefore reduce usage in peak hours. However average usage will remain the same or even increase. Furthermore it is likely smart grids will simply create new peak hours.