US utility BGE seeks rate rise to recoup smart meter costs

Baltimore Gas and Electric
Baltimore Gas and Electric claims customers are using less power and smart grid technology has helped with improving grid reliability and keeping consumer bills down

In the US, a Baltimore utility is seeking regulatory approval to raise consumer bills to recover the costs of deploying more than 1 million smart meters.

Baltimore Gas and Electric Company (BGE) has asked Maryland Public Service Commission to raise the rate of an average electric customer by 6% or US$7.64 a month, and that of an average gas customer by 11%, or US$7.56 a month, reports The Baltimore Sun.

Under US law, the utility is allowed to recoup the costs of its US$500 million smart grid capital upgrade, but has to prove that the investment was worthwhile.

When BGE applied for a monthly surcharge as part of its smart meter plan in 2010, the regulator said it needed to demonstrate that the system’s benefits were greater than its costs.

The utility said last week that its smart grid investment – part funded by US$200 million of government money – has led to energy and money savings through programmes like Energy Savings Days, in which customers reduce their use on days when energy use is expected to be very high and get a bill credit in return, according to BGE.

The utility had four Energy Savings Days in 2015.

BGE’s rate hike fatigue

Mark D. Case, vice president of strategy and regulatory affairs at BGE, countered claims that the utility’s proposed fifth rate increase in six years would fatigue customers.

Mr Case said the cost of electricity and gas has declined in the past few years, along with the price of natural gas, meaning that customers’ bills are about the same as they were in 2008, even with the rate hikes.

In addition, power usage has dropped by about 10% since 2008, reports The Baltimore Sun.

However, BGE last week reported that 4% of customers have opted out of the smart meter rollout, more than the predicted 1% of the utility’s customer base.

The PSC’s decision is expected in June 2016.