Maryland PSC urges utility to invest more of its own money in program.

Weekly update courtesy of URN #3976: Finding that any ratepayer benefits from an electric and natural gas utility’s proposed “smart meter” rollout would be “largely indirect, highly contingent and a long way off,” the Maryland Public Service Commission (PSC) has disapproved the company’s advanced metering infrastructure (AMI) program.

The utility, Baltimore Gas & Electric Co. (BGE), had submitted a plan under which every meter in its service territory would be replaced with a new AMI module. Although BGE professed that a stimulus grant of $136 million from the U.S. Dept. of Energy would be dedicated to the project, the PSC noted that total plan costs were estimated to be $835 million, with the company seeking to hold its customers liable for the difference via a special surcharge mechanism that would go into effect before the meter installation work even began.

The commission expressed displeasure at the utility’s attempt to saddle its ratepayers with the entire cost of the new metering equipment. Explaining that a utility’s metering network is a backbone component of its service system — i.e., part of its infrastructure — and that utilities traditionally have invested their own funds in such plant, the PSC said that it could not authorize the AMI initiative as proposed.

The commission added that it also strongly objected to another part of the plan that would have made time-of-use (TOU) rates mandatory for residential customers during the summer season. In the commission’s view, whatever benefits a customer might receive as a result of a smart meter being installed at his or her premises likely would be greatly mitigated, if not completely negated, by the combination of the surcharge and the mandatory TOU schedules.

The commission emphasized that its rejection of BGE’s smart meter program as presented should not be taken as an indication of the PSC’s nonsupport of AMI programs in general. To the contrary, the commission stated, it fully endorses the concept of AMI deployment, and it invited BGE to return with a revised AMI business plan that was more equitable in cost sharing and not as “untenable” as the present proposal. Subscribe to URN for the full story.