Baltimore Gas and Electric Company unveils smart grid plan


Kenneth DeFontes,
President & CEO,
Baltimore, MD, U.S.A. — (METERING.COM) — July 14, 2009 – Baltimore Gas and Electric Company (BGE) has announced the filing with the Maryland Public Service Commission (PSC) of a comprehensive and advanced smart grid initiative, including the planned installation of 2 million residential and commercial smart meters, that could potentially save BGE electric and gas customers in excess of $2.6 billion over the life of the project.

In an extensive pilot program that began in 2008, smart meters and a new pricing plan proved that customers can reduce peak electricity usage by about a third and enjoy significant savings. BGE is seeking prompt action by the Maryland PSC and federal approval of stimulus dollars to position the utility to move to the next phase of this potential smart grid investment.

"This landmark proposal is one of the most ambitious of its kind nationwide," said Kenneth DeFontes, president and CEO of BGE. "Our smart grid initiative includes a host of transformational programs and energy management tools that have the potential to make a meaningful difference in the lives of our customers and the communities we serve in Maryland.”

The first phase of BGE’s smart grid proposal would be the installation of 2 million advanced electric and gas meters, operating through a robust utility-to-customer, two-way communications network, which forms the foundation for an automated, digital intelligent grid. The utility is also planning to roll out a new smart energy pricing program as its standard rate schedule, which would pay customers rebates for reducing power consumption during peak periods. In the pilot of the advanced metering technology and smart pricing program, participating residential customers reduced their consumption during peak periods by 26 percent to 37 percent, saved more than $100 on average and gave the program a 93 percent satisfaction rating.

BGE’s ability to rapidly and most cost effectively carry out the smart grid initiative depends upon PSC approval and cost recovery in a timeframe that would allow the utility to qualify for a competitive Department of Energy (DOE) grant of up to $200 million to partially fund the initiative.

BGE estimates initial deployment and operating costs of nearly $500 million over five years, and expects that over the project’s lifecycle customer savings will exceed costs by a ratio of more than 3 to 1.

Under the cost recovery mechanism proposed by BGE, the monthly customer surcharge would be 38 cents per month for electric only customers and 44 cents per month for gas only customers in the first year of implementation, and the customer cost would increase slightly over time as benefits also ramp up. Over the life of the program, the monthly surcharge would average approximately $1.24 and $1.52, respectively, for residential electric and gas customers, and would be reduced based on the award of a DOE grant. Customer savings from reduced energy and operating costs will be several times greater than the amount of the surcharge.

"The program we’ve developed is essential to addressing the long term energy and environmental objectives of the EmPOWER Maryland Energy Efficiency and Conservation Act of 2008, which calls for a statewide reduction of 15 percent in per capita electricity usage and peak demand by 2015," added DeFontes. "Smart grid is the foundation from which we can build a more efficient and sustainable energy network in Maryland. It enables large scale penetration of renewable energy sources and allows us to begin the testing and research necessary to support next-generation transportation innovations, such as plug-in hybrid electric vehicles.

BGE is Maryland’s largest gas and electric utility, delivering power to more than 1.2 million electric customers and more than 640,000 natural gas customers in Central Maryland.