Pepco and other utilities that fail to meet new reliability standards could face much larger fines and have to pay them sooner under a measure passed Wednesday by the Maryland Senate.
The provisions are part of an effort to “beef up” a bill pending in the General Assembly that would create reliability standards for the first time and allow state regulators to fine utility companies when they fall short, according to Sen. Brian E. Frosh (D-Montgomery), who offered several amendments Wednesday.
Frosh and other legislators are responding to the poor performance by Pepco and outrage from constituents after the late January snowstorm that left nearly 200,000 customers in Maryland without power for up to five days. A Washington Post report found that the company ranks near the bottom in national surveys of reliability.
Under an amendment adopted by the Senate 27 to 18, the state’s Public Service Commission could start imposing penalties in 2012, instead of 2014, as the bill had said.
And penalties could potentially range into the millions of dollars. Prior to being amended, the bill limited fines to $10,000 per day per violation.
“All they’ve got to do is give us decent electrical service,” Frosh said in arguing for the changes.
Sen. Thomas M. Middleton (D-Charles), chairman of the Finance Committee, which considered the bill before it hit the floor, warned that higher penalties could lead utility companies to raise their rates in order to pay for upgrading their infrastructure.
He also argued that “multiple violations” could lead to fines much greater than $10,000.
A second amendment by Frosh that failed would have prohibited state regulators from allowing utility companies to raise their rates to make up for profits lost during service interruptions. An alternative was adopted by Middleton asking regulators to “study and consider’ doing that.
Senators also defeated an amendment proposed by Sen. Richard J. Madaleno Jr. (D-Montgomery) that would have created inspection and maintenance standards for utility companies.
The amended Senate bill is expected to win approval by the full body in coming days. The House of Delegates, which passed its own bill last week, would have to agree with the changes.