BGE took the political high road and decided to move forward with a modified version of its smart grid plan despite not receiving cost recovery via a surcharge tracker. In a news release the day it filed its modified proposal, BGE president and chief executive officer, Kenneth W. DeFontes expressed disappointment over the Commission’s June 21,2010 order but remained hopeful the revised plan would get approved; allowing the company to get on with the business of enhancing reliability, move toward meeting its EmPOWER Maryland goal to reduce energy consumption by 15 percent by 2015 and put to use the $200 million stimulus grant the company was in jeopardy of losing.
Although the revised plan was approved and the Maryland PSC stressed its decision should not be viewed as a no confidence vote in smart grid technology, the Commission also remained unpersuaded from its original position on cost recovery. The 51 page decision states:
…we will not authorize cost recovery for any approved ‘smart grid’ or AMI project through a surcharge.” We reached that conclusion because the proposed AMI deployment “would represent a large, but classic investment in BGEs distribution infrastructure,” precisely the kind of investment that BGE has recovered through traditional ratemaking for a century. We are not persuaded to deviate from these principles by BGEs arguments regarding the magnitude of the AMI investment or the possibility of negative reactions from credit rating agencies. Pg.32
When announcing its intent to proceed with smart grid implementation, BGE highlighted the Commission’s support of prudently incurred cost recovery rather than “unfair, post hoc nickling-and diming.” This was no doubt a shout out to the victorious AARP and the OCP!