Kenneth W. DeFontes
Jr., President & CEO,
BGE
 
Baltimore, MD, U.S.A. --- (METERING.COM) --- August 16, 2010 - Baltimore Gas and Electric Company (BGE) has announced that it will move forward with implementation of its advanced metering infrastructure (AMI) initiative, following its approval last Friday by the Maryland Public Service Commission (PSC).

“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,” said Kenneth W. DeFontes Jr., president and chief executive officer of BGE. “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, by making its decision on the initiative ahead of the cutoff indicated by the U.S. Department of Energy, BGE will be able to take advantage of $200 million in stimulus funding that was awarded the company.

In a statement BGE said its ability to invest the hundreds of millions of dollars in smart grid on behalf of its customers depends on predictability, certainty and fairness in being able to recover those costs. The PSC 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.”

In its Order the PSC ruled that BGE could seek cost recovery only “at the time that the company has delivered a cost effective AMI system.” (see BGE AMI program approved – with conditions)

BGE said it is further encouraged that the PSC accepted its proposal to conduct periodic reviews of project implementation on an ongoing basis, so that BGE and the PSC can more constructively work together to ensure that ongoing project implementation is meeting expectations and enable mid-course corrections, if needed.

“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,” added DeFontes. “We are absolutely confident in our ability to deliver the savings and benefits in a timely and cost effective fashion.”

Other conditions imposed on BGE include submitting for approval an updated customer education plan, and developing a comprehensive set of installation, performance, benefits and budgetary metrics against which the progress and performance of the initiative can be assessed.