State case has national implications for grid modernization.
William A. Mogel is an energy lawyer in private practice, and founder of the Energy Law Journal. Email him at email@example.com.
Seemingly swimming upstream to a national policy, backed by $3.4 billion in federal funds from the American Recovery and Reinvestment Act incenting the smart grid1, the Maryland Public Service Commission, in a unanimous 54-page decision, in Baltimore Gas and Electric, Case No. 9208 (June 22, 2010) denied recovery of $835 million in costs for deployment of smart grid initiatives. The PSC, in rejecting a surcharge proposed to be collected via a tracker, stated:
Although we share… hopes and even enthusiasm, for the long run potential and importance … of the “smart grid”… [t]he Proposal asks BGE ratepayers to take significant financial and technological risks and to adapt to categorical changes in rate design, all in exchange for savings that are largely indirect, highly contingent and a long way off…
The tracker virtually guarantees that the Company will recover from ratepayers the prudently incurred costs associated with the Proposal, a profit for its investors, and a portion of certain projected benefits, if they are realized. [W]ith the tracker in place, the Proposal is a “no-lose proposition” for the Company and its investors.