Thursday, August 12, 2010

Post # 35 - BGE’s Smart Meters: Down to the Wire?

BGE’s smart meter problems with the Maryland PSC (see
post nos. 25 and 29) are coming to a head. The PSC last week held hearings on BGE’s revised plan, and August 16, 2010 (this Monday) effectively is the date for the PSC’s decision. This is because BGE’s plans are predicated not only on MPSC approval of its cost-recovery mechanisms, but also on a $200 million stimulus grant from the U.S. Department of Energy.

As noted in a recent Special Report by DOE’s inspector general, the 2009 federal stimulus legislation provided DOE with over $36 billion for various environmental programs and initiatives. Approximately $4.5 billion of that was targeted to smart grid projects like BGE’s smart meter program, see here.

The inspector general’s report notes that approximately $32.7 billion of DOE’s stimulus grant funds have been “obligated,” i.e., awarded to projects that are going forward. But the report also notes that, under the terms of the stimulus legislation, the remaining $3.4 billion, including BGE’s $200 million grant, must be obligated by September 30, 2010 – or the grants expire.

While not addressing BGE by name, the report expressly singles out BGE’s situation (emphasis added):

Regulatory approval is needed for a number of previously awarded Recovery Act projects to move forward. As the Department's programs have no control over the outcome of regulatory reviews, it is possible that some obligations could fall through in the coming months, not allowing the Department sufficient time to re-obligate funds. For example, a local public service commission recently denied approval of an application submitted by a Recovery Act recipient to install equipment provided through the Smart Grid Investment Grant Program. OE [DOE’s Office of Electricity Delivery and Energy Reliability] officials stated that while the recipient’s efforts to obtain regulatory approval are ongoing, OE may need to quickly re-obligate $200 million in Recovery Act funds if approval is not received.
Press reports
indicate that DOE has agreed to wait until August 16 – this Monday – to decide whether the agency will revoke BGE’s funding and send the money elsewhere. There is no indication where DOE will send the money if the PSC turns down BGE again. Either way, we (and BGE) will have to wait and see. But not for very long, apparently.

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