The Maryland Public Service Commission will begin reviewing BGE's proposal for a smart meter rollout today. BGE resubmitted its amended proposal on Monday after the state PSC rejected its initial smart grid plan in June.
At risk is $200 million of stimulus money from the Department of Energy, which will be recalled if the proposal is not accepted by July 30. BGE says the current installation will save its customers $2.6 billion over 15 years.
The original proposal called for rate increases to pay for the project upfront, as well as mandatory time-of-use pricing. The current plan still calls for some increases (about 30 cents per user per month according to the filing), but BGE claims that will be offset by an average customer savings of about $100 per year.
The total cost to customers will come at about $160 million over the life of the project, according to the proposal, which will be recouped as the project gets underway by charging customers a fraction of what the original plan called for.
The Maryland PSC suggested the utility pay for this proposal as a regulatory asset, but BGE argues that smart grid upgrades are not classic utility infrastructure improvements and require a hybrid approach where it can recover 25 percent of costs while the project is being implemented and the rest through future base rate cases.
BGE claims that a tracker, which will allow for gradually phasing in the cost to customers, is not a guaranteed cost recovery mechanism, and that it provides opportunity for review. The proposal suggests semi-annual reviews of the tracker to ensure that customers aren't being swindled.
BGE also scrapped mandatory TOU pricing and instead made it optional for customers to pay lower rates during off-peak, while also enrolling everyone in a rebate plan for those who conserve energy during peak demand, similar to a plan that Washington D.C. is considering.
The utility also moved up its schedule for unveiling an energy management portal for its customers to October 2011, which will be much closer to the initial deployment of meters. In the first proposal, the portal was not proposed until nearly one year after meters were to start being installed. Many experts feel as though long delays in web portals have hurt some smart meter rollouts. However, BGE did not seem to take lessons learned from other utilities' smart meter deployments (other than making the case for recouping costs using a tracker) -- as lack of consumer engagement has been been a constant criticism of smart grid projects.
Maryland PSC is now establishing a schedule to reassess the BGE proposal, and it is unclear where the DOE funds will be allocated if the PSC rejects the current plan or does not make a decision within two weeks.