In a formal filing with the Maryland Public Service Commission (see PDF below) Berliner argued modernization should be included in the PSC’s recent effort to make utilities more reliable by requiring short-term and long-term reliability plans.
Berliner, an energy lawyer, has frequently taken on Pepco and last year held a Committee session on “Utility 2.0,” a more efficient, sustainable and reliable electric system that could include local micro-grids powered by solar means, biogas and gas fired cogeneration.
“There should be little debate over the fact that we need a very different kind of utility service. Our current system was born of a different era. Not only is the infrastructure antiquated, the utility paradigm itself is antiquated. Both the business model and the regulatory structure are sorely out of date. In an era of smart phones, we have the equivalent of the old, black rotary phone. It is sometimes said that if Alexander Graham Bell came back in time, he would have a hard time recognizing a phone. Not so with Thomas Edison — it would look all too familiar,” Berliner wrote to the PSC.
The PSC controls regulations for utilities such as Pepco, an investor-owned company that operates in Montgomery County, Prince George’s County and Washington D.C.
“We need a new system that would make Steve Jobs proud. That will require bold changes in the conservative culture of utilities and regulators alike. The technology exists. It is the institutional barriers that must be overcome to put consumers in control and to create a much more reliable, cleaner, and energy efficient grid,” Berliner added.
In the filing, Berliner cites a recent visit to the Food and Drug Administration campus in Silver Spring, which operates on a micro-grid powered with solar power and gas-fired cogeneration. The campus claims the grid has achieved 99.999 percent reliability over the past year and extra power can be sold into the surrounding grid.
Berliner would like to see the PSC allow Montgomery County to pilot a microgrid system in a residential neighborhood.
He also proposed smart meters that would more efficiently use power and dynamic pricing that would allow consumers to save money, as opposed to flat rates.
Seven members of the Montgomery County Council offered their disapproval of Pepco’s latest rate hike request, which came Friday and would mean an increase of about $7.13 per month for the average customer.
Councilmembers Roger Berliner (D-Bethesda-Potomac), Nancy Navarro (D-Colesville), Phil Andrews (D-Gaithersburg), Valerie Ervin (D-Silver Spring) and at-large representatives George Leventhal, Marc Elrich and Hans Riemer said they want to see reliability upgrades before supporting a rate hike:
We oppose Pepco’s request for a rate hike. We believe Pepco’s financial fortunes should be directly tied to its performance and that performance does not justify an increase in its rate of return. As it is, shareholders have fared a lot better than ratepayers.
We also do not believe that Pepco should be able to avoid a review of the prudence of its expenditures in return for expediting their reliability work. Rather, we believe that Pepco owes it to this community to expedite its reliability work using the traditional ratemaking process that ensures that Pepco can only recover from ratepayers costs that the Commission finds are just and reasonable. We fully expect that our County will fight this suspect, unwarranted, and unjustified request, and that the Commission will, as it has recently, protect Montgomery County ratepayers that have suffered for far too long.
Pepco says it needs the money, which includes a $60 million rate increase, an increase on return on equity and a grid resiliency surcharge, to improve reliability.
Berliner called the rate increase request “a little like Groundhog Day.” Pepco was denied a similar request about four months ago by the Maryland Public Service Commission, which decides on utility rate requests.
At that time, Pepco officials indicated they would turn around and ask for a rate increase again, a common occurrence in the utility industry, Berliner said.
“I don’t begrudge them their corporate interest in helping their shareholders,” Berliner said. “I’m not confident that the system has gotten fundamentally stronger. If we had another major storm, we still have a weak system.”
Berliner said he expects Pepco to be in the top quarter of reliability rankings nationally and even though the company’s return on equity is below the industry norm he is opposing the increase because its performance is also below the industry norm.
“My perspective is its return should be related to its performance,” Berliner said.
County Council President Roger Berliner (D-Bethesda-Potomac) has been one of Pepco’s harshest critics, but even he had praise for its performance in preparing for and dealing with Hurricane Sandy last week.
Some constituents have even emailed Berliner, unhappy he has complimented the much maligned utility company for helping to minimize power outages in the county and returning virtually all electricity to those without it within two days of the worst of the storm.
“This is what we pay them to do and they did it well,” Berliner said Monday. “It wouldn’t be honest to not give them credit for doing good work to prepare.”
Pepco secured more than 1,500 line personnel from other states to help what was expected to be a long recovery process. The company had predicted perhaps at least 100,000 outages in its Montgomery County, Prince George’s County and Washington, D.C. coverage area.
Those numbers didn’t materialize. Instead, about 7,000 customers in the Bethesda, Chevy Chase and North Bethesda area were without power during the peak of the storm late Monday night, a relatively low number compared to outages from June’s derecho storm.
Berliner did say the days of preparation before Sandy hit the East Coast helped as well as the fact that the D.C. metropolitan region didn’t get the worst of the storm.
Pepco Region Vice President Jerry Pasternak was at the Council Office Building in Rockville to sit in as Berliner spoke about Pepco to the media.
“I don’t think there’s any doubt that we had more boots on the ground in this storm. We had the benefit of tracking this storm for five days,” Berliner said. “Pepco I think did what it should do, which is to make sure we had people when we needed them. It was a combination of preparing well and being lucky and that was a good combination for Montgomery County residents.”
Berliner said the storm underscored the importance of creating a microgrid electricity system in certain parts of the county, part of the “Utility 2.0″ pilot he is helping to try to create.
County Council President Roger Berliner (D-Bethesda-Potomac) says Montgomery County can serve as a national model of a responsive and efficient electric utility operation, a far cry from the oft-criticized system of today.
To do it, the county would have to wade through the potentially difficult process of negotiating changes with Pepco, the privately-held utility company that provides most of the county’s electricity and that was once named the “most hated company in America.”
Berliner labeled Thursday’s Transportation, Infrastructure, Energy and Environment Committee meeting on the topic as the opening act of a “Utility 2.0″ program.
“Here we have an investor-owned utility that has its own economic interests and a business model,” Berliner said Monday. “We need to change this. We need to experiment.”
Berliner, an energy lawyer who has taken a leading role after the June derecho left thousands without power, envisions the type of microgrid technology — solar power or other means that provide decentralized power to specific communities — that has served institutions in the county well.
Berliner cited the U.S. Food and Drug Administration campus in Silver Spring, which has its own microgrid, as an example. He claimed the FDA has never lost power.
Though he hasn’t given up on pursuing a public power option, Berliner was careful to point out “Utility 2.0″ is a separate process.
“This is not buying [Pepco's] system. This is modeling and piloting a very different kind of utility system because of its experimental nature. In fact, we need Pepco’s collaboration because if they are in resistance, this is going to be a problem,” Berliner said. “I have always recognized it is an uphill battle and therefore, I don’t want to put all my eggs in [the public power] basket. I’m proceeding along parallel tracks if you will.”
Thursday’s committee hearing will include utility representatives from across the country, including from Pepco, Berliner said. He hopes to have a recommendation for the pilot program prepared for Gov. Martin O’Malley by March.
“The technological challenges are not that great. We have a pretty good sense of the kinds of things that can be done,” Berliner said. “It is the regulatory and institutional arrangements that are so difficult to come to terms with. …We need to have an intensive process.”
Berliner Asks For Another Option On Public Power — County Council President Roger Berliner (D-Potomac-Bethesda) asked County Attorney Marc Hansen for another opinion on what it would take for Montgomery County to pursue a publicly-owned electric utility. This comes after massive Pepco power outages caused by June’s derecho. [The Gazette]
Bethesda Row Ritz Camera Store Will Close — After the Beltsville-based company won permission to liquidate its remaining 137 stores, the shop on Bethesda (7263 Woodmont Ave.) will shut down. [Bethesda Patch]
Gambling Debate Reaches Fever Pitch on Your TV — Two rival casino companies have spent roughly $15 million for TV ads for and against the state gambling referendum on this year’s ballot. [Washington Post]
Berliner Talks Reliable Electricity in Annapolis — County Council President Roger Berliner (D-Potomac-Bethesda) said state agencies and regulators need to take a “more proactive role” in ensuring reliable electric service during the first meeting of Gov. Martin O’Malley’s task force on electricity reliability. O’Malley convened the group after the June 29 derecho. Berliner is an energy lawyer. [The Gazette]
Current Boutique Opening Saturday — Area consignment and fashion clothing store Current Boutique is set to open Saturday at 7220 Wisconsin Avenue. It will be the fourth Current Boutique location for owner Carmen Lopez, who also has shops in Clarendon, Old Town Alexandria and Logan Circle. [Bethesda Magazine]
Red Line Closure This Weekend — Metro will do major track work this weekend between the Grosvenor and Medical Center stations. Free shuttle buses will replace trains between the two stations from 10 p.m. on Friday to system closing on Sunday. [Montgomery County]
Flickr pool photo by AmyMarieMoore