Can Maryland create a utility of the future that is more reliable & customer responsive?

That question has been posed by the now newly re-elected Governor of Maryland, Martin O’Malley. He is seeking a “viable method to explore the contours of the utility of the future” with a pilot program to be proposed by March 15, 2013.

Utility of the future, in Maryland, you ask?

That was my reaction because the very grandiose wording of it suggests O’Malley either:

a) has it out for Baltimore Gas & Electric (BG&E) and Pepco, the two investor-owned utilities with the most Maryland customers;

b) he’s trying to set the stage for a run to win the Democratic presidential nomination in 2016; or

c) there just may be a way to make utilities more responsive and the grid more resilient in the wake of recent power outages, which continue to upset thousands of ratepayers.

Actually, I think it may be all three.

With both utilities poised to ramp up deployments of smart meters they began testing or installing in 2011-2012, the opportunity seems to exist for a sweeping improvement and less of a headache for the Governor and his handpicked Public Service Commission.

Kevin Gould of the National Oceanic and Atmosphere Administration took this photo as the Derecho approached central Maryland. CREDIT: Kevin Gould

This “Derecho” storm in central Maryland June 29, 2012 played an integral role in moving Maryland and its utilities to consider a different regulatory model. PHOTO BY Kevin Gould of the National Oceanic and Atmosphere Administration.

O’Malley picked up on an idea offered by the Energy Future Coalition after a unique storm swept across the Midwest into the Mid-Atlantic states in a matter of hours wiping out power along the way for several days. Although utilities had very little advance notice as they do with hurricanes, the so-called ‘Derecho” storm the night of June 29 (photo) pushed thousands of consumers over the edge. The resulting complaints were almost as deafening as the howling winds that night. I know, I experienced them both first-hand.

Rather than through traditional rate cases, the Energy Future Coalition, other experts and several stakeholders testified at Maryland hearing just 13 days after the storm there should be a better way to align utility compensation with consumer benefits. Some of the testimony focused on a new technological architecture of digital information, controls and end-uses which could be explored using a state pilot project.

Montgomery County in Maryland, which was among the local jurisdictions most hard hit by the storm (where I live), jumped on the bandwagon. Its elected officials, led by County Council President Roger Berliner, are asking that a pilot project also be designed for how both utilities serve its residents and businesses.

Initial conversations have established a “threshold willingness” of BG&E and Pepco to collaborate with the effort to design such pilots. What that means exactly remains to be seen.If BG&E and Pepco conclude early on their shareholders are going to take a hit, one can expect that willingness to evaporate. What then?

For starters, the Energy Future Coalition asked BGE and Pepco to provide it this month with:

  1. A summary description of their efforts already under way to test future technology, customer options, and incentive structures, in order to avoid any duplication of existing efforts;
  2. Their own ideas of what additional elements might be most useful, revealing, and productive to include in a new pilot project design; and
  3. Their suggestions of what limited areas of their service territories (already equipped with smart meters) might make the best test grounds for such a pilot project, with a good mix of customers and loads.

The Coalition is soliciting from other interested parties sugestions for any potential elements that could be included in the design for a coherent, manageable, and meaningful pilot project, with a deadline of Sunday, January 20th for their submission to info@energyfuturecoalition.org.

A list of proposed elements is to be developed and refined, annotated, and made available to other parties interested in participating or contributing.

Much of this information was carried in a report this week here by Smart Grid News. Funny, but neither of the two largest newspapers serving Maryland, as one barometer — The Baltimore Sun and The Washington Post — has carried any information about the pilot. If consumers don’t know about it, where are fresh, consumer-centric, ideas going to come from?

One or more preliminary pilot project designs are due by February 25, 2013 from the Coalition with support from the utilities and expert consultants. They are to include:

1. A statement of the purpose and proposed implementation of the pilot, key questions to be answered, and opportunities to be sought.

2. A listing of the design elements selected and the intent to be tested, highlighting common as well as differing elements in each pilot design.

3. Draft communications to customers in the pilot areas, and discussion of consumer options to participate or not.

4. Draft rate modifications

5. Draft service modifications

6. Pro-forma revenue/expense spreadsheets of expected costs and cost recovery, and

7. A draft stipulation as to how the utility and its customers would be protected from down-side risks.

As I like to say, stay tuned.