Don't Let BGE Hide Behind Derecho: Its Reliability is Bad Even without Considering Major Storms

Recently, Jeannette Mills, BGE's Chief Customer Officer,  penned an op-ed to the Patch regarding BGE's reliability. Mills mentioned that "during severe thunderstorms, the vast majority of the outages are caused by tree limbs, or in many cases, entire trees, coming into contact with our power lines".

This leaves the impression that BGE's problems are weather related. However, BGE is hiding behind the Derecho to mask serious problems with its reliability. BGE's reliability numbers are much worse than the national medians.

It's a little wonky, but there are standards by which to measure a utility's reliability performance. Those measures are "SAIDI", "SAIFI", and "CAIDI":"SAIDI" stands for System Average Interruption Duration Index, "SAIFI", stands for System Average Interruption Frequency Index, and "CAIDI", which stands for  Customer Average Interruption Duration Index (see the attached pdf "BGE DECLINE in Reliability since DeReg" for definitions of these terms.) 

These standards clearly show that BGE's reliability is awful, and ranks in the bottom quartile of utilities, when compared to a baseline of coop owned utilities. BGE is an investor owned utility (IOU), but there's no reason why it's reliability should be worse than a utility responsible to its members like a coop.

Let's walk through the numbers to see just how bad BGE is.

SAIDI is computed by adding all the hours of outages during the year, then dividing by the number of customers. SAIFI is measured by totalling the number of outages in the year, and dividing that amount by all BGE's customers. CAIDI is arrived at by dividing SAIDI by SAIFI.

Attached are BGE's Reliability Reports filed with the Public Service Commission for the years 2003 through 2008 (see the attached pdf "BGE Reliability Reports", 2003 through 2008 [the "2009" Report is for 2008- BGE sent it over as 2009]). 

I put together a spreadsheet using those BGE Reliability Reports (see the attached pdf "BGE DECLINE in Reliability since DeReg"), with SAIDI, SAIFI, and CAIDI numbers for the 2003 through 2008 years: you can find these numbers- both for "all interruption data" and "all interruption data minus major event interruption data" on pages 1 or 2 of each year's BGE's Reliability Reports.

I then compared the BGE Reliability Report values to nationwide medians, as listed by Wikipedia. When not considering "major events", BGE's SAIDI measure was 254% worse than the national median. It's SAIFI value was 52.73% worse than the national median. It's CAIDI value was 133.09% worse than the national median ("BGE DECLINE").

It's clear that, even when taking out the impact of big storms, BGE's reliability is terrible.

Ms. Mills then talks about "RM 43", a rule the PSC recently adopted which is ostensibly designed to improve BGE's reliability:  For more than a year, BGE, Maryland’s other utilities and other key stakeholders worked with the PSC as it developed regulations as required by the 2011 Maryland Electricity Service Quality and Reliability Act. These regulations, called RM 43, went into effect on May 28, 2012 and include standards intended to enhance electric reliability through a number of methods, including the increased management of trees and vegetation near power lines. 

Despite Ms. Mill's assurances, customers of BGE will continue to experience long outages and much frustration-even with RM 43 in place. That's because, according to RM 43- which has been converted into COMAR 20.50.02.12(D), BGE's numbers for SAIDI are only going to reach 3.44 hours per year in 2015. (see the "dsd.state.md.us/comar" link, chart).

http://www.dsd.state.md.us/comar/getfile.aspx?file=20.50.12.02.htm

This is a terrible performance level. For example, check out the 40 cooperatively owned utilities SAIDI numbers next (see the "ieee" link, scroll down to page 8; the pages aren't numbered, so count til 8).

http://grouper.ieee.org/groups/td/dist/sd/doc/2010-07-NRECA-Benchmarking-Study.pdf

This is a listing of 40 coops and their SAIDI measures, by minutes.  Coops were used because they are more responsive to their members, and are a pro-consumer standard to measure against investor owned utilities (IOUs) like BGE.

The top quartile (best performing) is at the left. The bottom quartile (worst performing) is at the right. Notice that this SAIDI listing excludes major events. Now, compare the RM 43 level for SAIDI for BGE by 2015, which is 3.44 hours (206.4 minutes). By 2015, the RM 43 level has BGE at 206.4 minutes, which would still be in the 4th quartile of reliability- that's worst quartile- as measured against 40 coop owned utilities. (The 4th Quartile begins at 201 minutes.)

Ms. Mills devotes significant space in her article on tree trimming. While such trimming likely has not been kept up to standards, it's interesting that BGE maintains it follows a regular 4 year cycle of tree trimming, which raises the question why its reliability would deteriorate if that really were the case.

One possible answer occurred at a recent Public Service Commission Hearing on the Derecho in Baltimore County. There, several BGE customers noted that they talked with line crews restoring power, and those crews said that the power lines were repeatedly spliced, indicating very old lines. Moreover, those citizens testified that a crew from Oklahoma pointed out that the power lines were the original lines installed by BGE in the 1940s. Those lines are 70 years old! (Note: transcripts of PSC Hearings are not yet available for this event; such transcripts likely will be available in a few days; however, those seeking same should note that the PSC charges a significant amount of money to provide anyone a copy)-cb

The IRS' depreciation guidelines for power lines have an estimated useful life of only 30 years for such wire. (see the "irs" link, page 112, chart, look for "asset class 49.14", "Electric Utility Transmission and Distribution Plant", "includes assets used in the transmission and distribution of electricity for sale..."see column at right "class life in years", which indicates 30 years for distribution power lines).

http://www.irs.gov/pub/irs-pdf/p946.pdf

Based on these facts, BGE's power lines are well past due for being replaced. As such, they're wearing out, and the failure of the lines may well account for the increasing outages- even events not associated with Major Storms, such events called "blue sky events".

Bottom line: BGE's reliability problems go far beyond the impact of Derechos and Tropical Storms like Irene. It has serious reliability problems, much worse than the national medians.  The failure to replace aging powerlines is likely part of the problem.

And, the PSC is not seriously addressing this problem. The RM 43 Regs adopted recently by the Commission allow BGE to remain in the bottom quartile of reliability- as compared to coop owned utility companies.