Panel tries crackdown on Pepco

January 14, 2011

The Maryland Public Service Commission is seeking authority to impose fines on Pepco and other power companies if they fail to meet tough new standards for reliability and customer service.

The commission this week published proposed rules that would establish how quickly the companies must get the lights back on after an outage. The rules also would mandate how rigorously companies must inspect their lines, how vigorously they must trim trees and how quickly they must answer phone calls from customers.

The rules also would increase the type and range of data that Pepco and other companies must report to regulators about power failures.

Public Service Commission officials took the action after complaints from Pepco customers who suffered extended interruptions after major storms last year.

The proposed rules also follow _topan investigation by The Washington Post that found that Pepco ranked near the bottom nationally among electricity companies in terms of keeping the power on and bringing the lights back once the electricity goes out - _topeven on calm days with no severe weather.

The Post found that the average Pepco customer experienced 70 percent more outages than customers of other big-city utilities for which data were available. And the lights, on average, stayed out more than twice as long. The newspaper's study concluded that Pepco's reliability began faltering five years ago but that company officials failed to stem the decline.

Bryan Moorhouse, counsel to commission Chairman Douglas Nazarian, said the release of the proposed rules "is sort of the beginning of the process."

The public and commission staff are invited to comment before a March 3 meeting on the issue. Moorhouse declined to comment further.

Officials at Pepco, Baltimore Gas and Electric, and the Maryland Office of People's Counsel, which represents consumer interests, said they were studying the plan, which the commission published on its Web site Wednesday evening without prior notice.

The move came as a surprise because it preceded a consultant's report on reliability problems at Pepco.

A task force in Montgomery County also continues to study the issue, and state legislators have said they are considering remedial legislation.

"They hit all the high notes," Paula Carmody, director of the People's Counsel Office, said of the commission's proposal. "But we need to take a look to see what we think of the details."

The rules would set specific benchmarks for Pepco and other Maryland utility companies. For example, they would establish that "it is an unacceptable level of performance for a utility to fail to repair a downed wire within 240 minutes after notification, at least 90 percent of the time."

Under normal conditions, which would exclude major storms, the rules state it would be "unacceptable" for a company to fail to restore service within eight hours to at least 90 percent of customers who were experiencing an interruption.

The rules also say that a utility "shall have an average customer telephone call answer time of less than 90 seconds."

A company also would have to trim trees and other vegetation as "necessary and appropriate to maintain electrical system reliability."

The penalty for failing to meet the new standards was unspecified.

Carmody said current law allows the commission to assess fines up to $10,000 per day and per occurrence for failures to meet legal obligations.

After The Post _toppublished the results of its investigation last month, _topPepco executives called a news conference at which they acknowledged they had failed to provide reliable power, and they said they planned to spend $100 million on improvements in Maryland and $90 million in the District.

That upgrade, they said, would cost the average customer in Maryland and the District an extra $1 a month.

Pepco serves 778,000 customers in the District and Montgomery and Prince George's counties.

Montgomery County Council member Roger Berliner (D-Potomac-Bethesda) said the surprise release of the regulations suggests that the commission wants to get ahead of any legislation that would set performance standards and reduce rates customers would be charged if a utility did not meet specific goals.

Berliner, a longtime energy lawyer, had proposed such language for a bill to Del. Brian J. Feldman (D-Montgomery), chairman of Montgomery's House delegation.

"The commission realized they could do something or it would be done for them," Berliner said.

He said he was disappointed that the proposal did not say utilities should be in the top 25 percent for reliability nationally, "but if these goals they have in here accomplish that, then that may be the same result."

The commission will accept comments on the proposals through Feb. 4.

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