Md. regulator on hot seat over Pepco outages
Maryland's top electricity regulator on Thursday drew fire from state lawmakers who charged that the state's Public Service Commission had been "absent" for years in evaluating the performance of Pepco and other electric companies.
Lawmakers said the state's regulator had failed to adequately hold the utility company accountable for lengthy power outages even as the company had cut back on maintenance and increased investor dividends.
"I'm concerned with where the PSC is and where they have been for the last several years," said Del. Benjamin F. Kramer (D-Montgomery), in a hearing in Annapolis on a bill to impose reliability standards on Pepco and other Maryland utilities. Nearly a dozen bills stemming from lengthy Pepco power outages over the last year are pending in the Maryland General Assembly.
"Quite frankly, what signals do you all need to have fully well understood that Pepco's performance has been abysmal?" said Kramer, a former car wash owner. "I wash cars for a living and I know Pepco's reliability is unacceptable ... You all are the experts. How is it that it's been lost on our friends on the PSC all these years and nothing has been done about it?"
"Respectfully, I'm going to have to take issue with the fact that it has been 'lost on us,'" responded PSC Chairman Douglas R. M. Nazarian.
Nazarian was testifying voluntarily in favor of a bill (HB391) drafted by Del. Brian J. Feldman (D-Montgomery) and backed by Gov. Martin O'Malley (D), that would direct the PSC to develop reliability standards for utility companies and to issue fines that would be credited back to affected ratepayers when electricity companies fail.
But Nazarian ended up on the defensive for most of the hearing.
"None of the five PSC commissioners live in the Pepco service area, is that true?" asked Del. Tom Hucker (D-Montgomery),
"Yes, that's true," Nazarian said.
"Well, now that you know so many of us with first-hand experience with this issue, I hope you'll stay in touch," Hucker said. He then added another question: Has the PSC ever studied the economic effect of lost power outages.
"No," Nazarian said.
Nazarian, a 2008 O'Malley appointee, said the PSC had studied the state's utilities' performances year-over-year "relative to themselves," but had never attempted to compare them to others across the country. He argued that "there is no such thing as a uniform, or national objective measure of utility reliability."
Still, Nazarian said the PSC had come to the conclusion that hardened standards are needed.
"We've discovered over the last year that it's not good enough to have a general standard that you have to [restore power] as fast as possible. We've decided there have to be concrete objectives to which utility companies are held accountable."
Feldman, the lead sponsor of the bill, equated electricity reliability in Montgomery County to a third-world country.
Del. Kumar P. Barve (D-Montgomery) said his family members in Mumbai, India have more consistent electric power.
Several lawmakers also sparred with Nazarian over whether the PSC could be trusted to implement the bill in a way to increase utilities' reliability.
How big a fine would the PSC levy against an underperforming utility, asked Kramer. What would be "big enough to bring about significant change?"
"I'm going to dodge that question," Nazarian said.
"One of the reasons why we haven't so far is that ... we don't have anything to measure them against, this is why we had trouble. ... We have to have something to measure utilities against before I can tell you what it is they have or haven't done."
-- A coalition has been formed to "organize citizens to pass meaningful regulation of electricity providers." Their Web site is www.PowerMD.org.
Aaron C. Davis
| February 24, 2011; 5:08 PM ET
Categories: Aaron C. Davis
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