Petition Closed

MD Public Service Commission has the power to fine PEPCO for its power failures --
and to plan to use it to create a "surge reserve" of trained local technicians to restore power promptly

Senator Jim Rosapepe (D, College Park) and Senator Brian Frosh (D, Montgomery) have written Maryland PSC Chair Doug Nazarian asking the PSC to impose fines of more than $100 million each for Pepco and BGE to fund a "Surge Reserve" of trained workers to end long power failures.
 
And you can sign on to their letter.
 
In the next few weeks, the PSC will be investigating the PEPCO power failures and deciding whether or not to get tough. The PSC has all the authority it needs.
 
But it needs to hear from customers who were the victims.
 
"The results of (the power companies') failure to face reality and modernize are clear to all Marylanders -- food rotting in refrigerators, hourly workers laid off, small businesses closed for days, and hundreds of millions of dollars in goods, services and productivity lost by our constituents," Senators Rosapepe and Frosh wrote.
 
In 2011, the Maryland legislature required the PSC to set reliability standards and increased the fines the PSC can impose to $25,000 per customer per day. 
 
With this authority, the Senators urge the PSC to:
 
-- impose significant fines on the utilities for their power failures, based on the economic dangers they caused and the need to incentivize them to change their behavior;
-- develop a plan to modernize our electric infrastructure of the 21st century, including selective undergrounding;
-- propose a "surge reserve" plan to the Governor providing enough technically-trained local professionals to restore service promptly to customers in the next predictable extreme weather event. 
 
If you agree, go to the petition page and add your name! 
 


 

Letter to
Maryland Public Service Commission
I just signed the following petition addressed to: Maryland Public Service Commission.

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Fine PEPCO $100 million for power failure

Dear Mr. Chairman:

As you and your colleagues know, reliable electric service is much more critical to Maryland's economic health in the 21st century than it was in the last century. It is the nerve system of today's economy -- from digital commerce and cloud computing to 911 emergency services, home offices, and smart phones. Its importance to our economy will only increase.

At the same time, climate change, predictably producing more extreme weather events -- from snow storms to brush fires, from hurricanes to derechos -- dramatically increases the risk to the old fashioned utilities like PEPCO and BGE which were built and are managed today for the economy and climate of the 1950's.

The results of their failure to face reality and modernize are clear to all Marylanders -- food rotting in refrigerators, hourly workers laid off, small businesses closed for days, and hundreds of millions of dollars in goods, services and productivity lost by our constituents.

In 2011, the Maryland legislature required the PSC to set reliability standards and increased the fines you can impose to $25,000 per customer per day. Despite the legislature's clear policy direction and creation of additional tools to enforce compliance, the power companies failed over the past week to meet their responsibilities to more than one million Marylanders. Thousands of Marylanders lost power for 6 days. Altogether, more than 3 million days of power service were lost.

Obviously this is intolerable if Maryland is to protect its economy.

Now the responsibility is yours -- to hold the utilities accountable, to provide powerful financial incentives for them to modernize, and to make sure that last week's crisis is never repeated.

We know you have the authority, because we gave it to you last year. We expect you to exercise it.

Specifically, we expect you to:

-- impose significant fines on the utilities for their power failures, based on the economic dangers they caused and the need to incentivize them to change their behavior;
-- develop a plan to modernize our electric infrastructure of the 21st century;
-- propose a "surge reserve" plan to the governor providing enough technically-trained local professionals to restore service to customers in the next predictable extreme weather event.

Fines: Under the law we passed in 2011, you have the authority to impose fines of up to $25,000 per customer per day. The utilities failed to deliver power to more than 1,000,000 customers for at least some of the last week and hundreds of thousands for several days. Some of the down time was inevitable, but the outages suffered by our constituents ran on for 5, 6 and even 7 days in many cases. Moreover, the communications to and from the carriers were inaccurate and ineffective.

We believe that your authority for imposing fines will likely run into the billions of dollars – certainly into an area greatly exceeding the annual revenues of the companies. We expect you to estimate the economic damage caused by the power failures, including damaged public and private infrastructure, destroyed consumer consumables, workers' lost wages and business owners' lost sales, and other losses to Maryland's economy. For example, if 500,000 residents lost an average of $200 food ruined when their refrigerators' power went off, the power failure cost our people $100 million from that alone.

If the Commission chose to impose fines of merely 1% of its authority ($250 per customer) for every day starting on July 2 (the third day after the storm), the fine for Pepco would be about $106,000,000, and the fine for BGE would be about $144,000,000. Such levels may or may not be high enough to incentivize the companies to invest adequately in long term solutions. The PSC should seek independent expertise to make that judgement.

Modernizing: Most of the damage to the utilities' infrastructure during the storm was caused by winds, knocking down utility poles and trees which then knocked down wires. Worldwide and in Maryland, experience has shown that undergrounding wires is the most successful and cost-effective long term fix. In Germany, the UK, and the Netherlands, the overwhelming majority of power lines are underground. More than a decade ago, France launched a major push to underground busy lines which would boost reliability. More than thirty years ago, the Maryland legislature required burying power lines in new developments. However, since so many Marylanders live and work in older areas and, even newer communities are served by old-fashioned, overhead distribution lines, most of the state remains at serious risk. At minimum, the PSC needs identify the specific lines which can be buried at the lowest cost and biggest improvement in reliability.

"Surge reserve": The wind knocks utility poles down, but people and equipment put them back up. Thus, the major determinant of how fast power is restored how many trained people and supporting equipment the utilities put to work quickly. Clearly, the companies' traditional approach -- overtime for their permanent employees and reliance on utilities from outside Maryland -- has failed. A new model is needed. An electric power "surge reserve" of trained technicians, similar to volunteer fire departments and the National Guard, is the obvious answer. In a state of more than 5 million people, recruiting and training perhaps 10,000 or 15,000 men and women should not be that challenging. Retired utility workers, retired military, independent electricians and other building trades, as well as simply able citizens, would all be candidates to join the "surge reserve," get trained, and commit to being called up as needed. Together with backup equipment, a "surge reserve" would cut cost of power failures dramatically by restoring service promptly. We urge you to develop the plan for the reserve in the next 60 days so it is in place before the next severe weather event. One option would be for utilities to create the reserve, funded by the fine which, as you know, goes to the state General Fund. If they refuse, the state or local governments could create the reserve.

In summary, given what we know about climate change and about the huge economic damage caused by power failures, now is the time for the PSC to use the tools it has to impose fines. Even using a tiny fraction of the PSC’s authority would result in fines in excess of $100 million each for the poorest performers -- Pepco and BGE. We urge you to use those funds to:

• develop a cost effective plan to underground strategically located power lines;
• plan and implement a “Surge Reserve” of technically trained specialists to restore power quickly.

We look forward to your prompt response.

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Sincerely,