AEP's Morris: Maryland decision
likely to give other regulators pause
June 24, 2010
Reaction to the Maryland PSC rejection of BGE's smart metering bid reverberated through the corridors and meeting rooms housing yesterday's National Town Meeting on DR and Smart Grid in Washington, DC. The regulators' decision surprised many in the industry since BGE had presented a project plan that was “well done” and contained “solid data,” AEP Chairman Michael Morris told us yesterday. We spoke with him as he was preparing to take part in a panel talk on industry predictions.
The decision certainly will have implications in other states where utilities are pursuing smart grid-related initiatives, Morris said. “Others will look at it and wonder why,” he said. The PSC on Monday voted down BGE's request to install smart meters to 1.2 million customers across its service territory and institute mandatory TOU pricing (SGT, Jun-22).
Smart grid and other energy efficiency-related programs still in their infancy are having trouble gaining acceptance in many states, said Morris.
“I expect that will remain the same,” he told us yesterday, adding “commissions are very, very sensitive to any rate increase” during economic recessions.
AEP is working on an innovative smart grid project in Ohio (SGT, Jun-17) and a smaller pilot program in Indiana.
While many in attendance at the meeting viewed the PSC's decision as potentially harmful to smart grid's short-term success, Connecticut Consumer Counsel Mary Healey interpreted the decision as an opportunity for executives in the smart grid sector to engage in discussions with consumers and their advocates.
BGE and other parties involved in the case will have a chance now to find ways to improve the utility's smart grid plan, said Healey, who also serves as president of the National Assn of State Utility Consumer Advocates. She applauded the commission for asking BGE to conduct a better cost-benefit analysis of its project, and she sympathized with regulators for suggesting ratepayers should not have to shoulder the risk of the project via an up-front surcharge. “Let's step back and see how we can do it better,” she told people attending a talk about power consumers.
“I don't know what was in the head of the commissioners,” but they may have been aware of PG&E's problems with its AMI rollout in Bakersfield, Calif, (SGT, May-11) and hiccups in smart meter deployments elsewhere in the US, said DRCC Executive Director Dan Delurey, the host of the conference.
Even if the industry does a better job communicating and educating customers about its reasons for pursuing smart grid projects, there will be hesitation from regulators and state consumer advocates before these programs are put into place, said Delurey.
Healey offered back-to-basics advice: “You have to at least prove that the costs are going to be outweighed by the benefits,” she said.
© 2010 MMI Inc.
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