Baltimore Gas and Electric Company (BGE) has announced it is implementing a smart grid throughout its Central Maryland service territory. BGE’s acknowledges that its ability to invest hundreds of millions of dollars on a smart grid is dependent on being able to recoup the costs. To that end the Maryland Public Service Commission (PSC) found that the public interest is served by a decision to move forward with this initiative.

The commission also assured BGE of its right to recover “prudently incurred costs” related to the project, as well as an appropriate return, and that its future review of costs will not be subject to “unfair, post hoc nickling-and-diming.”

Kenneth W. DeFontes Jr., president and chief executive officer of BGE says, “Following the Maryland Public Service Commission’s approval of our project this past Friday, BGE is pleased to move forward with our ambitious smart grid program and deliver the significant transformational benefits of smart grid to each of our 1.2 million customers. Those benefits include at least $2.5 billion worth of savings for BGE customers over the life of the project, as well as major new enhancements in customer service and reliability. In addition, BGE will be able to take advantage of $200 million that the U.S. Department of Energy awarded BGE for its innovative program, reducing the cost of the project for BGE’s residential customers by 80 percent.”

DeFontes also notes, “Our decision to move forward also reinforces our continued commitment to helping the state meet its aggressive energy efficiency and conservation objectives under EmPOWER Maryland, and to enhancing the service we provide our customers.”

The PSC also accepted BGE’s proposal to conduct periodic reviews of project implementation on an ongoing basis, so that BGE and the PSC can work together to ensure that ongoing project implementation is meeting expectations.

“We strongly believe that a gradual, annual phasing-in of both the benefits and costs of smart grid is the best approach for our customers and the company,” notes, DeFontes. “Although the commission chose a different regulatory method than we proposed, we will work with the commission to find ways to better align the benefits and costs of the project while mitigating the potential for a rate spike at the end of deployment.”

The PSC also approved BGE’s general plan for long-term, customer-focused education and communication surrounding the smart grid.

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