The idea is as follows. Montgomery County Government will work with the PSC, Pepco and a team of outside experts to design a new grid serving tens of thousands of Montgomery County residents. The experts come from a team of utility sector thinkers who are working with municipalities around the country to revolutionize how we manage power at the grid level. We heard from this team at the Council committee.
The demonstration grid would involve Pepco in making enhancements that Pepco might not have made, with an eye towards gradually transforming the entire grid in Montgomery County.
The new grid would have different kinds of switches and infrastructure to enable it to be repaired more quickly, user energy more efficiently, and even draw from locally-generated power (solar or geothermal, for example).
Grids like this do exist, particularly in jurisdictions that have publicly-owned power. We have an investor-owned grid (Pepco). While we are pushing forward on public power, we need to work with Pepco now because there are ways we can achieve better service by working together.
In order to implement this project we will need support from the PSC and the Governor, the County Executive and Council, and collaboration from Pepco.
At the same time, this does not distract from the shorter term game plan that has been outlined by the PSC for how to force Pepco to improve its service. That plan is as follows: The PSC has required Pepco to reach improved reliability standards. If Pepco does not reach those improved standards, it will be fined and it will also not receive certain rate hikes; and the PSC may reduce the rate of return that Pepco is allowed to charge. Additionally, Pepco will not be allowed to charge rate payers for investments that it should have been making when it was rewarding investors and neglecting its infrastructure.
That policy or regulatory agenda for the PSC is our best shot to force Pepco to improve over the short term. I think this demonstration project is a fantastic opportunity to transform our grid over the long term and give residents not only a higher quality of service, but also a grid that can serve as a platform for innovation in service delivery, customer control, environmental responsibility, and sustainability.
Tuesday night, hundreds of residents crowded into the County Council hearing room to witness and testify to the PSC about Pepco’s response to the Derecho.
There were so many powerful moments. Two that I will never forget: First, the testimony from Mary Caroline Colletti, who told the PSC that she lost her asthma medicine in the Derecho outage and couldn’t afford more medicine because her insurance does not cover this kind of loss. Then, she said, when the new storms were approaching the following weekend, she faced an almost debilitating stress worrying how she would breathe if another outage occurred:
“The Sunday after the derecho, there was a pending and worrisome forecast for another severe approaching storm which damaging winds, etc., later in the day it became apparent, thankful Montgomery County would be spared. Harnessed with the knowledge and horrid memories of Pepco’s slow and ineffective power restoration prospects, I became so stressed for myself and friends, for over 16 hours I was confronted with a series of severe asthma attacks. Laden with fact, if my power went out, it could be days before electricity would be restored, in light of the regressive, worsen performance by Pepco after each “unique event.”
Mary Caroline Colletti’s Testimony from Tuesday’s PSC Hearing on Pepco
Video Courtesy of the Montgomery County Public Information Office
It is an utter outrage that any Montgomery County resident would have to live this way.
Then there was the testimony from another constituent. The reason I was so struck by this testimony is that it was almost my own story. I will never forget the look in my wife’s eye, during the outage of the 2011 ice storm, as she considered the consequences of losing a month’s worth of breast milk that she had carefully stored in the freezer. Thankfully we did not lose that supply that year, but she lost hers in the derecho:
“Last month, I poured my entire reserve supply of breast milk down the drain, 48 ounces, which would have been 12 feedings, a 3 day supply in case my 6 month old baby Avery and I were ever separated in an emergency. It had been stored safely frozen, giving me peace of mind, until Pepco’s derecho debacle left us without power for 6 days. If any of you have ever breastfed an infant, you know what it can take to get that far ahead. I am now just keeping up with his daily needs for daycare, with no reserve supply, because I have never been able to get ahead since the massive power outage that struck our region following the June 29 storm. This is especially difficult because I just returned to work full-time at the end of July and was counting on that back-up supply in case I fell behind. From talking to my friends, I know I am not the only working mother of a breastfeeding infant who suffered the same consequences.”
Additional Testimony from Tuesday’s PSC Hearing on Pepco
Video Courtesy of the Montgomery County Public Information Office
People worried that they won’t be able to breathe or take care of their babies. This is what poor regulation of Pepco has brought us in Montgomery County.
As I said earlier, these are just a few highlights of the personal testimonies from many residents affected by Pepco’s poor service standards. For those who were unable to attend the hearing or are interested in hearing from other residents, a full recap of the PSC hearing is available.
We are fighting back. The hearing might be over, but we are determined to keep the momentum going and ensure that Pepco is held accountable by the PSC. Click here to see how you can get involved with our efforts.
A coalition of citizens and advocacy groups is coming together to push the PSC to do its job and hold Pepco accountable. Tuesday’s gripping hearing was the first step in the campaign.
Please contact email@example.com if you want to get involved. That is the email address established by Abbe Milstein, an outraged resident who is organizing for change.
In my conversations with Montgomery County residents, the driving question they have is, Where is the accountability for Pepco?? Who is going to make sure that the company will improve its service and that the unacceptable service we have received since 2004 will change?
There is an answer to this question. Accountability lies first with the PSC and second with the Governor.
And they have the tools to make Pepco change. Here is what we need to do.
What the PSC can do The Maryland Public Services Commission (PSC) has the power to regulate Pepco. In response to our dire circumstances and the outcry from our residents, the PSC has established a framework that cansolve our problem, ifthey follow through:
Pepco will be required by the PSC to reach “average” service standards within 4 years.
If Pepco does not meet those standards, the PSC will fine Pepco.
Pepco will not be eligible to charge ratepayers to “catch up” for its neglect in the past.
The PSC will reduce Pepco’s profit or rate-of-return in order to fund improvements without putting the entire burden on ratepayers.
In a recent appearance before the County Council, PSC Chair Douglas Nazarian described the commission’s new standards for Pepco. He also promised to aggressively enforce them. Nazarian told the council that the PSC expected to see better performance for Pepco.
” And if we don’t… I promise you, not only as a regulator and as someone who shares the public’s frustration, the council’s frustration with the outages of the last couple years, but as someone who is charged with the obligation under Maryland law to enforce these regulations to hold the company accountable, I promise you that we will do that. And we will do that in a very meaningful and very significant and, if necessary, very painful way.”
This framework that the PSC has established will only work if they follow through on it. Already we are seeing Pepco fighting back aggressively, arguing that if they don’t get higher rate hikes we won’t get better service. We will need to keep the PSC on the job by:
Ensuring that fines are consistently large enough to force Pepco to change.
Ensuring that Pepco doesn’t charge ratepayers for their past mistakes, by blocking unfair rate hikes and reducing Pepco’s “rate of return on equity.”
Raising the service standards that Pepco must meet above “average.”
What the Governor Can Do The Governor is a key player in this reform process because the Governor decides who serves on the PSC and can make it clear what expectations he has for their actions. In response to the crisis, the Governor has launched an executive review of our electricity system. While this is indeed urgent, dealing with Pepco will require a different set of actions than what might be required to improve utility reliability in response to climate change. With Pepco, the problem is the company’s culture and management, not climate change. The solution is tough regulation.
The Governor can:
State clear support for the Pepco-oriented regulatory agenda outlined above.
Only nominate PSC members who clearly support this agenda.
Help reform how the PSC engages with residents so that we can be heard, as we work with the Governor to hold Pepco accountable. From a resident’s perspective, I believe the PSC is impenetrable, and this is part of the reason that the crisis at Pepco was not recognized by the PSC for years.
What you can do Not only the PSC and the Governor, but all elected officials at every level should support a tough regulatory agenda for Pepco. The 2014 election cycle is underway, and it will be essential to combat Pepco by obtaining clear commitments to support this agenda from statewide and local candidates.
You can do three things to hold Pepco accountable right now.
1. In the aftermath of the derecho storm on June 29, I launched a petition calling for the PSC to be fired for not dealing more aggressively with Pepco. Nearly 5,000 county and state residents have signed that petition. By adding your name to this petition, you will receive communications about ongoing efforts to hold Pepco accountable.
2. The PSC is holding a hearing on August 7 at 7 PM in the County Council’s hearing room. Our address is 100 Maryland Avenue in Rockville and the hearing room is on the third floor. This is your chance to tell the PSC directly what you think of Pepco’s storm performance. Please attend.
3. Several Montgomery County residents are working with other residents to organize a grassroots organization to hold Pepco accountable. You can contact Abbe Milstein at firstname.lastname@example.org. An organization of this kind can help give Pepco customers a direct voice and help hold the company, the PSC and all political candidates accountable on this issue in 2014.
Finally, there is the question of revoking Pepco’s franchise and establishing a publicly-owned distribution system. I am a strong supporter of pursuing a public power option, because I believe it would save Montgomery County taxpayers countless millions of dollars that are now diverted to shareholders. Our first step, though, must continue to be solving the problem at hand: holding Pepco accountable. Let’s make that happen. Thank you for participating.
It has been about eight years now since the crisis at Pepco came to light, and as far as Montgomery County residents are concerned, nothing has changed.
The 2012 “derecho” storm is the latest disaster, but the problem has been growing for years. In 2011, there were hundreds of thousands of power outages after an ice storm. There were severe outages from storms in 2010, and 2008, and after Hurricane Isabel in 2003.
In Maryland, utility companies are granted a monopoly in exchange for submitting to direct supervision by one agency, the “PSC” (Public Service Commission). The PSC is an independent agency, but the Governor appoints its members and has the power to replace them.
That’s why I started a petition on SignOn.org to Gov. O’Malley and the Maryland legislature, which says:
“The PSC is an independent agency, but the Governor appoints its members and has the power to replace them.”
As a county government, we have no direct power over Pepco. I can talk until I turn blue about what I think Pepco needs to do better, the fact is that only the PSC can change Pepco, and only the Governor can change the PSC.
Thank you for joining my call to bring accountability to Pepco and Maryland’s utility companies. I welcome your comments below.