On June 21, the Maryland Public Service Commission (PSC) denied Baltimore Gas & Electric's (BGE's) smart grid proposal, saying customer savings were uncertain and far off. The smart meters, expected to cost US$482 million to install and $835 million over the 15-year life of the program, were to be paid for with the federal grants and customer surcharges.

In its ruling, the PSC said the proposal was a “classic utility infrastructure investment that should be recovered through distribution rates, not in a supplemental surcharge that begins long before customers could realize any benefits from the project.”

BGE, a subsidiary of Constellation Energy Group Inc., said the meters would have given customers the tools and information they need to better manage their energy usage and save money.

BGE has filed for a rehearing of its amended smart grid proposal with the PSC. BGE's proposal includes plans for the installation of 2 million smart meters and is expected to save BGE customers in excess of $2.6 billion over 15 years, far exceeding project implementation costs.

The cost of implementing smart grid for BGE customers also will be reduced if the state takes advantage of a $200 million federal stimulus grant — nearly half of the program's initial costs. However, BGE customers will not benefit from this savings if the PSC does not act favorably on BGE's smart grid proposal. Absent prompt reconsideration and approval by the PSC, the DOE has indicated its intention to shift the $200 million to another smart grid project with a more certain outcome.

Consistent with testimony during hearings on the original proposal, BGE has withdrawn a mandatory time-of-use (TOU) rate structure. In the filing, BGE retains an optional TOU program that enables customers to pay lower rates for using energy during off-peak hours. Most importantly, all customers are automatically eligible to earn significant rebates from conserving energy during periods of peak demand.

For more information, visit www.bge.com.