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Report: Customers to Pay BGE, Pepco for Lost Storm Income

BGE and Pepco will reportedly be able to charge a fee for losses suffered when power was out to hundreds of thousands after the June 29 storm.

This story was updated to include comments from BGE.

BGE and Pepco are allowed to recoup some of the money lost after the severe storm June 29 by charging a fee to be paid by customers who were without power, 9 News Now reported.

"It's the law," Pepco spokesman Bob Hainey told 9 News Now. "It's called bill stabilization."

Should bill stabilization result from a storm-induced power outage? Tell us in the comments.

"The storm adjustment kicks in automatically,"Maryland Public Service Commission spokeswoman Regina Davis told 9 News Now. "The BSA (Bill Stabilization Adjustment) is calculated and applied by the companies, but checked by PSC staff and we make the utilities correct it if they get it wrong."

The charge, BGE Spokesman Rob Gould said, is in the “distribution” part of a customer’s bill; the part that covers the infrastructure, tree trimming and other non-supply related costs, and only applies for the first 24 hours of an outage.

Gould likened the BSA somewhat to taxes that pay for government services such as trash collection. During an extreme weather event “you’re not getting a refund on your taxes because the trash wasn’t picked up.” he said. “You’re still paying your full taxes. It’s similar here.”

“When the meter is not powered,” Gould said, “When there’s no service, you’re not paying for energy because you’re not using energy.”

This news comes as utility companies are coming under increased scrutiny.

On Tuesday, county executives from across the state  and share information with government officials during an emergency. 

According to Pepco's website, "The BSA is a monthly adjustment that ... will lower rates if Pepco is receiving more revenue than the PSC has approved, and will increase rates if Pepco is receiving less revenue than the PSC has approved." That way, Pepco can "promote energy efficiency programs that will help customers reduce their energy use and drive down electricity supply costs," the website adds.  

The fee, Gould aid, would likely be “less than a buck.”

Such fees are not allowed in Virginia or Washington, DC.

Read more on 9 News Now.

Read more about the powerful "derecho" storm and its aftermath:

 

MG42 July 11, 2012 at 04:34 PM
So the regulators, the PSC, allow the power companies to bill for power when the power is out. Hahahahahahaha This is the logical conclusion of government getting involved in business. Don't be mad at BGE- government is solidly to blame for this.
David J Iacono July 11, 2012 at 04:49 PM
I guess all those campaign contributions from BGE to both Democrats and Republicans is paying off.
jag July 11, 2012 at 04:58 PM
If these Power companies are able to recoup money lost, then they should be responsible for food lost due to their inability to provide their service.
CAW21227 July 11, 2012 at 04:59 PM
I wonder if the people who DIDN'T lose power in the storm are going to be charged this fee also. This is so unfair to everyone involved. It's adding insult to injury.
CS July 11, 2012 at 05:34 PM
Agreed David and jag.
Michaelwritescode July 11, 2012 at 05:52 PM
PSC concedes to allow BGE to charge more after a major recovery effort to allow them to recoup some of their costs since the PSC is primarily responsible for determining how much BGE can raise their standard rates every year and, in effect, how much BGE can spend on improving their infrastructure (after the cost of doing business and lobbying is out of the way of course) not to mention mandating specific infrastructure improvements. At least that's probably the on paper reasoning behind it. How much of this is really required and how much is the result of very good BGE lobbyists is a matter for debate. It certainly does cost a lot to hire all those out of state workers and replace all the needed equipment though and I wouldn't expect BGE to not charge an extra fee after a storm like this or invest substantially more in infrastructure of underground lines to avoid needed to charge a fee without the PSC around.
USA Forever July 11, 2012 at 05:53 PM
Definately an issue when state's regulate industry. Correcting deregulation was a promise under all three governors since I have been living in Maryland. All promises and no action except my electric bill increasing (like my taxes!!!). We need government to get out of the way and let free market decide.All the "choice" we have is an illusion!!!!
Shirley Miller July 11, 2012 at 08:03 PM
I cannot believe this, we were without power for 6 days, we didn't complain, we pay our bill every month on time for 37 years never late, last our power was out for a week, we didn't complain, you know what this is getting rediculous, I think I am ready to complain. We were able to get a generator from my son so we could keep our refrigerators running and it cost us $50 a day to run it and BGE wants us to pay them for losses thats stupid. Take it out of the big shots bonuses.
josh mason July 11, 2012 at 08:57 PM
All businesses should be prepared for unexpected expenses, even when they are extreme. BGE won't reimburse the 100 dollars worth of food that I lost. They won't be paying a benefit to anyone that needed medical attention or died due to the extreme heat after the storm. I don't care if the fee is less than a dollar, their customers had to cover those costs on their own, everyone was impacted by the storm and everyone should be responsible for covering their own costs.
Diana July 11, 2012 at 09:06 PM
So they can impose a fee to keep their revenue relatively stable and that way, Pepco can "promote energy efficiency programs that will help customers reduce their energy use" who will then still pay the same because of the Bill Stabilization Adjustment. Well then why should I care about using less energy if my bill won't really go down!!!!!!
MG42 July 12, 2012 at 01:57 AM
If the government is limiting what BGE can charge, BGE should tell the politicians to go fly a kite when they complain that BGE is not doing enough to keep them in the loop, etc. Have you noticed that the more the government gets involved, the more screwed up things get? Interesting pattern.
Maia July 12, 2012 at 11:58 AM
BG&E just sent me a letter asking for permission to shut off my power during an emergency but you already do! I have no interest in paying for a cost recovery fee-PSC you need to fix that. My questions for PSC and BG&E - what are you doing in the areas of energy assurance planning and how are you coordinating with emergency responders? How is renewable energy generation being utilized during power outages? What progress has been made on smart grid and burying power lines?
Ladyhawkkk1 July 12, 2012 at 12:31 PM
BGE / Constellation Energy Group Inc top executives need to give up their bonus packages to help. Some of them make million’ of dollars. Let them come down to the real world and help out - Oh.. Wait I forgot everyone received a $100.00 rebate when they merged. SOOOO nice of them..
Madmachare July 12, 2012 at 01:43 PM
BGE is a piece of work. I am so disgusted by them. We live a street over from their hub and it took FOUR days to get power restored. Not to mention that a week before the storm my neighbor called in a tree hanging on the power line...........it is still there! In the 8 years I have lived on my road i have seen BGE cut the trees back from the power lines 1x. Why is it not in their budget to cover cost of storms? they are making profits every year and they cannot cover the storm and yet we are left for days..........(my parents went SEVEN days without power) and are to still be charged??? We spent $45 a day paying for gas for a generator and then BGE wants to tack on more charges??? Kiss my @ss BGE! I agree with redflash let the BGE execs take a pay cut or give up their bonuses........they must be in O'Malley's back pocket.......smh
BOH July 12, 2012 at 05:12 PM
The myth of deregulation ignores lessons of the past. The free market is decidedly problematic, particularly in monopolization, gouging, and safety. Read Upton Sinclair's "The Jungle" for a snapshot of an era when government was "out of the way and let free market decide." The best way to address such problems is better regulatory policies and procedures, not scrapping regulation entirely. Actually, the latter would be worse than anything we have now.
USA Forever July 12, 2012 at 05:53 PM
disagree with you BOH. I beleive that the world of "The Jungle" is a thing of the past. The public is far too informed now to allow companies to dominate us as in the past. The state government continues to control what companies are allowed to provide power to Maryland. This is true for other industries as well (all types of insurances as an example). This causes companies to lobby politicians and contribute large amounts of money to campains to get favors. This is true for both Rep and Dem. Get government out of the way and allow comsumers to make the choices. I trust Americans to make the right choices based on their needs. More regulation will allow the current situation to continue and grow worse. We would actually have more choices to energy production as well (nuclear, water, wind tubines, etc) if the free market was able to actual work.
MG42 July 12, 2012 at 06:27 PM
I also disagree with you, BOH. If the meatpacking industry was so bad, perhaps Sinclair should have started a competing meatpacking company rather than writing a fictional book. The "free market" (of which there really isn't one, sort of like a euclidian line) is amazingly efficent, effective and smoothly running when compared to government involvement. Most monopolies today actually exist BECAUSE government does not allow them to have competitors. BGE is an example of this. As a side note it's amusing that you consider the utility business "deregulated" when there is the PSC involved in every aspect.
Michael July 12, 2012 at 08:34 PM
BGE has a lot of nerve talking about recouping "losses" so that they can get things "back on track". That is BS. BGE doesn't use the money we pay on a monthly basis to keep the infrastructure up to date, nor do they retain crews that are necessary to restore power when it goes out. This is why there was a slow response. BGE is full of crap, and only cares about the bottom line profit, not whom they provide power for. Charging people for services NOT USED is the height of arrogance, and should be met with utter contempt. Their excuse for this "fee" is an absolute fail.
Nicholas Aleshin July 12, 2012 at 11:38 PM
What about the food that spoiled in my fridge? What about my lost sleep (as a sleep apnea sufferer, I cannot sleep without electricity)?
Aaron from Baltimore July 15, 2012 at 01:50 AM
The distribution charge in my last BGE bill, divided over the thirty-day billing period, works out to a bit less than $.50 per day, but we'll call it four bits for simplicity's sake. Per the article, the "bill stabilization" charge applies only to the first 24 hours of an outage, i.e. one day. There are fourteen individuals in this thread whining about having to pay an extra four bits on their next BGE bill. By my math, that works out to seven bucks out of pocket if I cover the difference for the lot of you, which I will gladly do in exchange for you promising to try and obtain something in the vague semblance of a sense of perspective. Let me know if there's interest in this proposal, and I'll provide an address to which to apply. One significant point, so far ignored in this analysis, is that distribution charges are calculated on the basis of energy used. The score on my last BGE bill was 520KWh, about half the 2010 average for Maryland. We don't have a lot of fancy appliances, or indeed even central air. Perhaps some of you, for whom living simply is more of an aspirational goal than a simple necessity, have more reason to complain than I imagine. (Maryland average home power usage figures via United States Energy Information Agency, found at http://205.254.135.7/tools/faqs/faq.cfm?id=97&t=3 .)
Billie Byard August 03, 2012 at 04:06 PM
With the charge from the power companies, I strongly feel Pepco and BGE should be responsible for each customer that lost all of their food - spoiled food caused by not having refrigeration; all the hours that people lost from work; medical bills from people that were hurt from this storm. WHO do these power companies think they are......charging customers a "stabilization" fee. GIVE ME A BREAK. Who can we charge for all of our losses.
Michele Fultz August 10, 2012 at 09:03 PM
There are other energy suppliers in your area. Please contact me if you would like to understand more about energy deregulation:)

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