Jeannette M. Mills, VP, Customer Operations & Chief Customer Officer
Today we filed a request with the Maryland Public Service Commission (PSC) for adjustments to our electric and gas delivery service rates — the portion of your utility bill that funds investments in the poles, wires, underground cable, substations, pipelines and other equipment that deliver energy safely and reliably to you.
This proposal would add approximately $7.22 per month to a typical residential electric bill and $4.62 per month to the typical residential gas bill. Overall, total bills would still be lower than they were in 2009 as a result of improvements in energy efficiency and the steadily declining energy commodity costs that make up about 70 percent of your bill.
Even so, we understand that cost increases are never welcome. We have sought these increases prudently, with this marking only the second such request for electric delivery rates in almost 20 years. However, the need to invest in our systems is ongoing so that we can continue to safely and reliably provide electric and gas service to you.
Making Safety and Reliability Improvements
System investments often go unnoticed, as was the case earlier this year when we transferred part of downtown Baltimore’s power supply from an outdated substation to a newly built facility on the city’s west side. The transfer was seamless. Not a single customer lost power or noticed the transfer, yet it was the culmination of years of work that will provide reliable
service to customers for years to come.
We are making similar investments in electric reliability projects throughout central Maryland. We also have extensive natural gas projects under way throughout the region, working in dozens of communities to replace hundreds of miles of cast iron gas mains with more durable, modern pipes. The task of keeping these systems safe and reliable is never-ending and it is funded through the delivery service rates which must keep pace.
Another area of investment addresses the utility poles and overhead lines that have been the focus of much attention following last year’s hurricane and tropical storm and this summer’s destructive derecho. More than 60 percent of our electric lines are underground, but we do have more than 370,000 poles — almost one-third of which are more than 40 years old. While we have continuously replaced older poles and have a comprehensive inspection and maintenance program, many poles installed during the regional growth that took place in the 1950s and 1960s now must be replaced. This requires a significant financial investment and we are committed to making the best use of available funds.
Suggestions to bury all existing overhead lines are understandable, but this could only be done at a substantial cost to customers. We do selectively move certain power lines underground when it is appropriate, and we are always considering our options for enhancing our service to customers. However, underground lines are not immune to outages, with damages often taking longer to identify and repair. Additionally, our existing underground power lines require significant investments over time. We have been steadily replacing existing underground cable, increasing spending from nearly $29 million in 2011 to a planned investment of approximately $49 million in 2013.
Providing Ways to Save on Your Overall Bill
Helping you make the best use of your energy dollars and control costs is what has led to new, innovative programs, including PeakRewardsSM
that provides bill credits to participants for cycling air conditioning and electric water heaters during periods of high demand. We also offer rebates for energy-efficient lighting
and energy check-ups
that identify ways for homes and businesses to use less energy. Customers are also shopping
for the best prices from electric and gas suppliers. Electric customers can offset the proposed rate adjustment by taking advantage of electric supply plans, some of which currently provide savings of up to $10 per month, based on today’s electric commodity prices.
Of course, our customers who choose their energy suppliers experience the same level of delivery service from BGE, and we are committed to making the necessary investments to continue improving the equipment and systems that make safe, reliable energy possible. Any associated adjustment to rates would become effective only after the thorough PSC review concludes, expected to be in February of next year. We will continue to provide you with updates throughout the process. In the meantime, we continue our work to maintain and upgrade the systems that serve you.