Thursday, December 22, 2011

Maryland Public Service Commission Fines Pepco $1 Million

The Maryland Public Service Commission (PSC) has fined the Potomac Electric Power Company (PEPCO) $1 million for tree-trimming failures that have led to dramatically higher outage durations.  The PSC has also threatened to disallow future rate increases unless it improved its performance.  And just when we were impressed with PEPCO's tree trimming action.  They must have know this was coming because they have been out tree trimming like crazy in Prince George's County, Maryland. 

Although each day of outages costs businesses and consumers tens of millions of dollars, we have felt that PEPCO has done a pretty good job of restoring power.  We have to admit that they have fallen down a bit on the tree trimming though.  Appears they are trying to make up for it now.  But do not forget that the legislator and regulators REALLY BURNED PEPCO WITH BOTCHED DEREGULATION. The order said that tree-trimming failures led to dramatically higher outage durations and frequencies in 2010.

The commission order said:

“Pepco’s history of inconsistent and sometimes contradictory tree trimming practices between 1999 and 2010 imposed more costs and outages on customers than otherwise would have been the case had the company adhered to one coherent strategy. Pepco’s reliability problems were amplified by the utility’s refusal to increase the frequency of its tree trimming from once every four years to every two years. Those lapses contributed to poor performance in national reliability studies and increased the power system’s vulnerability to storms "
The commission also concluded that Pepco failed to conduct periodic inspections of its distribution lines and did not conduct after-storm inspections or patrols. Interestingly, PEPCO is replacing distribution lines along with the more aggressive tree trimming. The commission was especially critical of Pepco’s inability to accurately estimate how long it would take to restore service after major storms.

The order noted that Pepco had already initiated a five-year, $300 million program to improve reliability and planned to pass the cost along along to consumers. The commission cautioned that if the program did not reduce outages, the utility might have to pay those costs itself.

A Washington Post analysis found that the average Pepco customer experienced 70 percent more outages than customers of other big-city utilities and that the lights on average stayed out more than twice as long.  Accoring to The Post, Pepco’s reliability began declining five years ago, but company officials failed to immediately mobilize to counteract the decline. (Wash Post, 12/22/2011)

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