Pepco’s Reliability Woes

Posted on March 14, 2011. Filed under: News | Tags: , , , , , , , , |

It’s not news to Maryland and DC residents that Pepco’s service reliability has been subpar lately. Both Maryland and DC customers have lost power during rain and snow storms, as well as those unexplainable and maybe even more frustrating “blue sky” outages. Pepco leadership has admitted to these failings after reports ranked the utility near the bottom for both relaibility and customer service.

The Maryland Public Service Commission released an independent consultant report this month that showed the deterioriation in reliability goes back to 2004, when Pepco failed to make distribution grid improvements after Hurricane Isabel. This same report concluded that Pepco’s own reliability plan was thrown together hastily without much thought or analysis.  Pepco has denied this claim and has faulted dense tree cover for much of its reliability woes. However, as this insightful Washington Post analysis from December 2010 points out, the argument does not excuse poor performance, as utilities in cities with similar or denser tree cover have been able to provide much more reliable service to customers.

Frustration over Pepco’s performance has been a growing concern for citizens and lawmakers in DC and Maryland. In Maryland, numerous open letters to Pepco as well as ads targetting the utility appeared on the campaign trail this fall. Governor Martin O’Malley released his letter to Pepco executives in January.

During this session, the Maryland General Assembly,  led by legislators from Montgomery County, is taking a serious look at bills that would hold Pepco and the other utilities in the state to a higher standard for reliability and service. As of this writing, there are at least three bills in play that would do something to help beleaguered consumers.

HB 391/SB 692 – The House version’s  (HB 391) chief sponsor is Montgomery County Delegate Brian Feldman (D-15). Most of the other MoCo legislators are on board with this and it was a O’Malley Administration priority. The Senate version is sponsored by Senate Finance Committee Chairman Mac Middleton (D-Charles County). Many MoCo Senators are on board as well. This bill would require Pepco and the other utilities to achieve certain minimum performance standards or face serious penalties from the Public Service Commission. The bill would strive to put Pepco and the other utilities at the top of the class, rather than the bottom, nationally.

HB 1171/SB 749 – The House version is sponsored by House Economic Matter Committee Chair Dereck Davis (D – Prince George’s) and the Senate version by Senator Roger Manno (D-19), a Montgomery County legislator.  This bill also requires the utilities to report on their performance, though in a slightly different way than the other bill. It looks at the effect on income lost for businesses, hardship for the elderly, and other factors.

HB 1278 – This bill only has a House version, sponsored by Montgomery County Delegate Tom Hucker (D-20). It would prevent Pepco and the other utilities from charging customers for times when the power was out. It provides a real financial incentive for Pepco and others to do a better job, while protecting consumers from paying for something they shouldn’t have to pay for.

These bills are all good efforts at addressing the serious problems in the Pepco and Delmarva service areas in particular. Let’s hope they pass, because the record shows the utilities need to improve a lot. The chart below illustrates average reliability of the various service areas in Maryland as measured by the System-Average Interruption Duration Index (SAIDI) and the System-Average Interruption Frequency Index (SAIFI). Pepco and Delmarva have the highest results in each category.

Average Reliability Results (2005-2009)

Distribution Territory SAIFI (Measures Frequency of Interruptions) SAIDI (Measures Duration of Interruptions)
Allegheny 1.09 3.28
BGE 1.49 4.09
Choptank 2.16 3.94
Delmarva 2.23 5.73
Pepco 2.14 5.70
SMECO 1.15 2.57
Source: MD Public Service Commission via Fiscal Note HB 391

Other proposals in the Maryland General Assembly suggested everything from moving utility lines underground to getting rid of Pepco altogether (WaPo features a great overview of these suggestions here).

On the local level, Montgomery County Councilmembers Nancy Floreen, Roger Berliner and Marc Elrich have all recently commented on Pepco’s performance. Councilmember Elrich has even suggested replacing Pepco with a Public Power Utility. Such a utility is owned by the public (the government) and is therefore hopefully more mindful of stakeholder (public) interests instead of being narrowly focused on investor profit.

In DC, Councilmember Mary Cheh has been a vocal supporter of increased regulation and reliability standards for Pepco. In January, Cheh introduced legislation to the Council to improve Pepco’s reliability.  As she explained last month on an appearance on the Kojo Nnamdi Show, she believes the DC Public Service Commission should be much more vigilant in regulating Pepco’s reliability than it has been in the past and that Pepco’s investors, rather than ratepayers, should pay for the penalities Pepco accrues during outages.

Stay tuned for more updates on the Pepco’s reliability challenges and the legislative response. Hopefully it will result in more than just another “5-point, 10-point, 16-point plan”

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[…] Also, you can read the recommendations of a Montgomery County Pepco Work Group which produced a 200+ page report with community and expert input and recommendations for Pepco.  (Read back-story HERE) […]


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