By Jake Ulick
Baltimore Watchdog Staff Writer
Citizens testified before state regulators Monday night to voice their opposition to a proposed rate hike by Baltimore Gas and Electric Co. while supporters of the utility argued that the rate increase was justified.
BG&E customers cited concerns over cost, lost jobs, and issues of privacy with regard to BG&E’s new smart meters, which most don’t see as a useful investment.
“I am for business expansion. I am for efficiency. I’m also on the side of the consumer when it comes to saving money,” BG&E customer Mike Johnson said during a hearing before the Maryland Public Service Commission. “And that’s not happening. So, essentially what I see here in a nutshell is that the fat cats are getting fatter and the poor person is struggling even more.”
The proposed increase would raise electricity rates 6 percent and natural gas rates 11 percent, which would result in an estimated $15 a month more to the average residential customer’s gas and electric bill.
The rate increase is intended to help BG&E recover the cost of implementing its Smart Grid program, which consisted of the installation of more than 1 million smart meters.
The request would also help the utility cover the cost of Baltimore City’s recent increase in conduit fees, which are paid by utilities to use the city’s underground conduit system of power lines to carry energy.
This was the Maryland Public Service Commission’s (PSC) second of five public hearings that are scheduled throughout the region to allow customers to comment on the company’s rate-hike request, which was made in November 2015.
Bill Fields, a senior assistant attorney at the Maryland Office of People’s Counsel (OPC), which represents the interests of residential customers in utility matters, said the utility’s current rates are reasonable and should not be raised.
He also said the OPC has not found the smart meters to be cost effective.
“In this particular case, there’s always arguments over what the reasonable return on investment is for the utility,” Fields said in an interview during the public hearing at the Towson University Marriott Conference Hotel. “The utility has a lot of dollars invested in equipment and it’s the commission’s job to determine, each time there’s a rate case, what a reasonable rate of return for that is. And not surprisingly we always have a strong difference of opinion with the utility folks about what that would be.”
Local resident Gregory Steward said customers should not be expected to pay for the smart meters because this was BG&E’s decision to upgrade its infrastructure.
“Giant Supermarket’s not asking us to pay for new shelves for them to put their canned goods on to sell them to us,” Steward said. “With the economy as it is, I’m barely scraping by as are many other people. Fifteen dollars a month doesn’t mean anything if you make $100,000. But to me it hurts like heck. That’s $15 less I have to eat off of a month.”
Dr. Helene Breazeale, a professor emeritus at Towson University and recently retired president of the board of directors of the condo association for the Villages At Homeland West, echoed that sentiment.
She also contested the $75 fee that BG&E charges customers who want to opt-out of the smart meter program.
“Now BGE comes to us and says we need to pay $15 more a month in order to pay for the smart meters that we didn’t want in the first place,” Breazeale said. “This, to me, is unconscionable, and a hideous way to do business. Speaking for our 414 owners, I beg you not to approve this rate increase. BG&E has to learn that in the rest of world, you get the money first and then you do the job.”
In addition to finding the rate increase unreasonable, Baltimore City resident Kate Ellis pointed out that the utility is likely saving money because the smart meter program means fewer meter readers.
“They don’t even need people to ride by the houses to pick up the meter reading like they used to,” Ellis said. “They’ve completely eliminated that labor cost. They’re saving millions of dollars. We should not be paying for these smart meters, which, in my view, were totally designed to save BG&E the cost of the labor for reading the meters.”
Justin Mulcahy, BG&E’s senior communications specialist, disputed the notion that the smart readers were installed to cut labor costs, specifically, the jobs of meter readers.
“Meter readers weren’t fired,” he said. “Many were trained for other positions in the company while others left due to natural attrition or left the company.”
He added that the smart meters have many uses, such as being able to detect outages remotely. He said the meters also allow customers to monitor their energy usage in greater detail and thus lower their own energy use.
Thanks to the smart meters and other programs like BG&E’s Smart Energy Rewards, Mulcahy said customers have saved $2.30 a month for every $1 invested by the utility.
Since 2013, customers have also earned over $28 million in bill credits thanks to the new energy saving programs, he said.
“You want to modernize your infrastructure and that’s what BG&E is doing,” Mulcahy said.
Ron Brown, the director of corporate relations for Towson University, testified in favor of the rate increase, saying that he uses the data provided by his smart meter every month to figure out where he can save money.
He said he has had a positive experience working with BG&E officials, adding that the utility’s programs have helped the university reduce its energy consumption by 25 percent.
The CEO and president of the Baltimore County Chamber of Commerce, Keith Scott, stressed the importance of investing in innovation, likening the installation of smart meters to upgrading from pour-over coffee to a faster machine.
“You would have to recoup the cost from spending on the modern equipment,” Scott said. “But that’s common sense because it creates a sense of efficiency.”
He said the chamber supports the rate hike because the utility needs a way to recoup its costs for upgrading equipment.
“I think that the residents and the business community in Baltimore County understand the need and understand that it’s time to go modern,” Scott said.
The PSC is set to make a decision on the proposed rate hike in June. If approved, this would be the fifth rate hike in the past six years.
The commission will hold three more public hearings where citizens can submit testimony in person. The next meeting is at 7 p.m. Wednesday in the George Howard Building, Banneker Room, which is located at 3430 Courthouse Drive in Ellicott City.
The fourth public hearings will be held at 7 p.m. March 16 in the Bel Air Town Hall Rotunda at 39 Hickory Avenue in Bel Air. The final public hearing is scheduled for 6 p.m. March 17 at the William Donald Schaefer Tower at the Maryland Public Service Commission hearing room on the 16th floor, 6 St. Paul Street in Baltimore.