North America
26 November 2015

US regulator orders utility BGE to slash opt-out fee by 50%

opt out

The US Public Service Commission ordered BGE to reduce its opt-out fee charged to consumers who opt out of its smart metering programme from US$11 to US$5.50 per month

In the US, Maryland utilities regulator on Tuesday ordered Baltimore Gas and Electric Co (BGE) to reduce its monthly fee of US$11, charged to customers who have opted out of the utility’s smart metering programme.

In what will be seen as a landmark case against other utilities seeking to cover manual meter reading costs, BGE will now charge a monthly opt-out fee of US$5.50 to customers who have not adopted the new technology since its deployment in 2012, reports The Baltimore Sun.

However, the Public Service Commission's order does not alter the separate US$75 upfront fee that 51,600 BGE customers who opted out of the new meters were charged resulting in collection of about US$6.1 million in opt-out fees.

The utility claims the penalty fee will be directed to fund maintenance of the old system.

The commission cited concerns about the large number of BGE consumers in low-income neighbourhoods apparently opting not to have smart meters installed for its order to reduce the monthly fee.

The commission has also asked BGE to file quarterly reports about the ongoing revenues and costs associated with opt-out customers.

However, consumer advocates have called for BGE to draft creative ways to reach non-responsive customers as findings show that less than half of the utility's 51,600 customer base actively declined the technology.

The consumer advocates are also expecting the reduction of the penalty fee will return about US$2 million per year to customers.

Smart metering in the US

The news comes as other utilities are finding ways to recoup costs of smart meter rollouts.

In February 2015, investor-owner electric utility American Electric Power Company said it was looking to raise base charges for smart meters in a bid to recoup under-collection of charges to cover smart meter rollout costs.

AEP, which delivers electricity to more than 5 million customers in 11 states, asked regulators in Ohio to allow it to raise the collection charges.

Commercial and industrial customers who paid US$2.10 on their monthly bill for a smart meter would see this increase to US$4.34, or a 52% increase.

Residential customers would see an 51% rise, from 51 US cents to US$1.04 a month, according to documents filed by AEP.

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