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Posted at 10:07 PM ET, 08/18/2010

How the PSC ties BGE and Pepco's hands

By washingtonpost.com editors

By Edward Portner
Silver Spring

As noted in the July 31 editorial “Gridlock,” in June the Maryland Public Service Commission (PSC) denied a rate increase that BGE said it needed to add smart meters. The editorial should have also noted that the meters would have enabled the utility to immediately assess the state of outages in the whole system, which would greatly improve response to large-scale power losses.

Just days before the most recent power outage centered in Montgomery County [“Back-to-back blows smack region around,” Aug. 13, Metro], the PSC denied most of a rate increase that Pepco sought to upgrade its distribution system, which is the heart of the outage problem. The rationale in each case was that some customers might not be able to afford any rate increase, as if the unreliability of power systems does not have significant economic consequences for the same customers, as well as health and safety implications.

In response to the public outcry about the number and duration of power losses in Maryland, on Aug. 12 the PSC initiated a proceeding to investigate the reliability of Pepco’s electrical distribution service. While this inquiry is needed, it would be more appropriate for the Maryland legislature or the governor to investigate why the PSC has denied two important recent requests to improve electrical system reliability in Maryland.

Pepco clearly has problems with reliability, response time and communication, but the environment for system improvement will not change as long as the PSC keeps sending the message that utilities should not bother. The Post should also do a better job of connecting the dots on this issue.

By washingtonpost.com editors  | August 18, 2010; 10:07 PM ET
Categories:  HotTopic, Maryland  
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Comments

Perhaps I misunderstand corporate accounting, but it seems to me the gist of this opinion is that, since the public won't accept a rate increase, Pepco shouldn't have to do things like set up a tree-trimming plan or install smart meters, because that would cut into their profit margin.

Am I right?

Because, if so, essentially what we have in this country is welfare for big business. Since when is it the government's responsibility to, in essence, GUARANTEE a certain profit margin for a company? Because that's what seems to be at play here; if Pepco can't get more $ from customers to pay for what should be required for the societal good, then it's okay by the government?

I thought this was supposed to be a free market system here, and yet it seems companies don't want to dip into their revenues for improvements and affect their yearly profit--and our government seems to think that's perfectly okay. Where is it written in the Constitution that all businesses must show X% profit each year?

Posted by: cr1957ny | August 19, 2010 1:56 PM | Report abuse

why don't they just ask obama for some stimulus money?

Posted by: jiji1 | August 19, 2010 3:40 PM | Report abuse

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