Maryland regulators are investigating an unusual billing mechanism that allows utilities to raise rates temporarily to recover money they lose when electricity use drops — and as a result allows them to charge residents for the first 24 hours of outages, such as that suffered by hundreds of thousands in the aftermath of a June 29 storm.
The Maryland Public Service Commission has been examining the so-called Bill Stabilization Adjustment for several months, but it has doubled down on its efforts in the weeks after the storm. The commission on Thursday scheduled a public hearing on the BSA at its headquarters in Baltimore on Sept. 24.
The BSA, which is intended to encourage energy conservation, can also work against utilities, depending on the weather. During unusually cool months, when the heaters are blasting and unusual amounts of electricity are being used, the BSA serves as a credit on a customer’s bill.
But when power isn’t used, even when a storm has left people in the sweltering dark, the company can recover losses by adding a charge. Maryland officials have said the charge for the power lost after the June storm could be less than a dollar on the average residential bill.
In a statement, Montgomery County Council President Roger Berliner (D-Potomac-Bethesda), a long-time critic of the BSA, commended the commission for hosting the public hearing.
“I believe the Commission’s willingness to reexamine this policy demonstrates that it is hearing what our citizens are saying,” he said. “This issue is not so much about dollars as it is principle — Pepco should share the financial pain associated with power outages.”
Pepco will file a public comment by Sept. 19, ahead of the public hearing, spokesman Bob Hainey said in an e-mail. Any changes to the BSA would affect all utilities in the state.
Also on Thursday, Council member Nancy Floreen (D-At Large) sent a letter to County Executive Isiah Leggett (D), urging him to complete a “full assessment” on Pepco’s performance following the June 29 storm. She also urged the executive branch to identify any “legislative remedies” to ensure that Pepco releases any data necessary to make the assessment.
“Given the extraordinary financial losses that the County and its residents have suffered as a result of the electric infrastructure problems over recent years, there can be no doubt that the time has come to take more aggressive action,” she wrote in the letter. She added that she wanted the assessment done by November.
Leggett did not immediately respond to a request for comment Thursday.