Pepco reliability plan 'cobbled together' without detailed study, report finds
Tuesday, March 8, 2011
Pepco's multimillion-dollar plan to reduce power outages and improve reliability was "cobbled together" without detailed study and could fail to achieve its goals, a team of independent consultants has found.
The consultants told Maryland regulators in a new report that Pepco appears to have put the plan together in a single month as "a quick attempt to throw money at the problem, or, more accurately, to quickly promise to throw money at the problem."
It recommended that Pepco revamp the plan to emphasize its most vital parts, such as tree trimming.
"Pepco acknowledged that it does not know whether the projects in the new plan will actually achieve its reliability goals because it had not fully analyzed them," the report said. "With this ready-shoot-aim approach a portion of the Company's planned capital spending is almost certainly poorly targeted."
Bob Hainey, a Pepco spokesman, disagreed with the consultants' conclusions about the reliability plan. "We don't feel like that is something that was just cobbled together," Hainey said. "We're spending millions in additional money to trim trees. We will probably have a discussion with them on that."
Pepco announced the plan amid harsh criticism for ongoing reliability problems. It has been the cornerstone of Pepco's repeated public pledges to improve after sustained complaints from customers, elected officials and regulators about the utility's performance.
Pepco officials have estimated that the five-year improvement plan would cost customers in the District and Montgomery and Prince George's counties about $1 more a month, if regulators approve a rate hike. The utility has 778,000 residential and business customers in the region. The consultants' report estimated that the plan would cost $256 million in Maryland alone.
Maryland's Public Service Commission requested the report in October and directed Pepco to pay for the evaluation.
The consultants and a spokesman for the commission declined to comment on the report and its findings.
Hainey said the company is still examining the report but is pleased that the consultants found the power system overall to be "well-designed" and "robust." Since last summer, Hainey said, Pepco has trimmed 1,500 miles of tree line. He said that work is paying off in increased reliability.
District regulators on Monday separately proposed rules that would impose financial penalties on Pepco if it failed to meet new reliability standards and move into the ranks of top-performing utilities nationwide by 2020.
Hainey said Pepco does not oppose enforcement standards that are "fair and reasonable."