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Pepco, PSC Critics Air Grievances In Front Of Political Candidates

By Aaron Kraut

Thursday - 11/7/2013, 10:00am  ET

Flickr photo by Bill in DC

With Pepco officials barred from the event, power reliability advocates on Wednesday sharply criticized a regulatory climate they claim is heavily stacked in favor of the electric company and against customers.

And in a significant step for Pepco critics, the advocates aired out those grievances in front of a large group of county and state political candidates.

North Bethesda resident Abbe Milstein, through her Powerupmontco email list and funding from AARP, hosted the event in a conference room at the Bethesda North Marriott Hotel & Conference Center.

The forum was tightly controlled. Milstein said she rejected requests from Pepco officials, including Montgomery County lobbyist Jerry Pasternak, to attend. Milstein also said she faced political pressure in the form of harassing emails in the days leading up to the event, though she wouldn’t specify who sent the emails or what exactly was written because the communications were confidential.

Much of the background was provided by energy attorney Stanley Balis, who represented Montgomery County in a past rate case. The goal, according to Milstein, was to educate political candidates on the complex state system for regulating utilities such as Pepco.

Balis, along with Milstein and Town of Somerset Councilmember Cathy Pickar, depicted a feckless Public Service Commission and General Assembly swayed by Pepco campaign contributions. The presentation included a 50-page booklet to guide a detailed talk on state utility law and recent rate cases.

District 16 House of Delegates candidates Jordan Cooper, Hrant Jamgochian, Marc Korman, Gareth Murray and Kevin Walling were in attendance. So was current delegate and District 16 State Senate candidate Susan Lee.

County councilmember and county executive candidate Phil Andrews attended and was later joined by one of his opponents — County Executive Isiah Leggett.

Del. Heather Mizeur, running for the Democratic gubernatorial bid, attended briefly. Republican gubernatorial candidate Charles Lollar was there.

Also in the audience was District 18 Del. Al Carr, who has introduced legislation to improve the transparency of the PSC and provide reimbursement for individuals or nonprofits hoping to be part of the rate case process.

Balis argued that Pepco shrewdly got legislation passed that allows separate reliability standards “for each electric company,” to account for things such as “existing infrastructure.” Balis said that means Pepco has been rewarded for having a dilapidated infrastructure, because the PSC can take that infrastructure into account while determining standards for the duration of power outages and frequency of power outages.

The PSC’s standards for 2012-2015 give Pepco more leniency with regard to the frequency of power outages than the state’s other five major electric companies in each year. Pepco’s prescribed standards for the duration of power outages are generally stricter than the other five companies.

“To put this into school terms — because Joey, who did no homework or studying has only a 25 percent average in his reliability course, he does not need to do additional studying or remedial work to quickly improve to the highest grade or even to an average passing grade,” Balis said. “That might be very nice for Joey, but not for his customers.”

Balis also claimed the Grid Resiliency Task Force created via executive order by Gov. Martin O’Malley after last year’s derecho set up Pepco’s justification for a controversial “Grid Resiliency Charge” in its most recent rate increase request. (Pepco CEO Joseph Rigby on Wednesday said the company would file another rate hike request by the end of the year, according to The Gazette.)

The PSC approved the Grid Resiliency Charge in August, disappointing many and inviting an appeal from Montgomery County and others. Pepco will get $24 million for a “Priority Feeders” project, known as a “tracker,” to “accelerate the hardening of 24 feeders that are prone to outages during major storm events, 12 feeders each in 2014 and 2015.”

The tracker will mean an additional 6 cents on monthly bills in 2014 for average residential customers, an additional 19 cents per month in 2015 and an extra 27 cents per month in 2016.

Bolis pointed to testimony during the last rate case in which two Pepco executives, based on the recommendations of the Task Force, said the company would simply not accelerate improvement projects on its priority feeders without the grid resiliency charge paid out up front.

That caused Public Service Commissioner Lawrence Brenners, in his opinion on the rate case, to wonder, “who is regulating whom here.”

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