The BGE Domino is Down

Jose Antonio Vanderhorst-Silverio | Aug 14, 2010

        

On page 15 of ORDER NO. 83531, issued by the PUBLIC SERVICE COMMISSION OF MARYLAND, on the 13th day of August, 2010, I found that "BGE acknowledges, however, that the Company’s response was designed primarily to mitigate risks, rather than to allocate them. And, indeed, the Company does not believe it should share in the risk:”

On page 17 it adds that “… the Company expects full cost recovery, with no risks or contingencies, whether or not the benefits materialize.

On page 45, it further adds “BGE expresses genuine enthusiasm throughout for the opportunities the “smart grid” offers for the Company and its customers, but continues to argue that the Company should not be expected to bear any of the risk that the costs to customers might fail to yield benefits… But BGE concedes, as it must, that the Company’s responses are designed primarily to mitigate the risks to customers, not to allocate them between the Company and its customers."

On page 47, we find the key response of the PSC “… one way or another, customers must achieve some level of supply-side benefits –perhaps only a fraction of what BGE projects – or they risk paying in full for something they have not received.”

The conclusion of the ORDER has denied BGE full recovery, as it states that "... at the time that the Company has delivered a cost-effective AMI system, the Company may seek cost recovery into base rates."

This is in accordance with my Prediction #1: Recognizing the emerging global power industry in the complete context around the Intelligent Utility Inside article Baltimore G&E: AMI Comeback? and that of this EWPC article, the Maryland PSC “No so fast” decision on the BGE proposal is highly likely the 1st domino of the chain reaction that is going to start “knocking over the next” state regulator’s utility case, “which upsets the next one, and so on.” See the EWPC article Three Smart Grid Predictions for Initiating the Global Power Industry Transformation. 

yyy