BGE faces anger from customers, questions from regulators

Hurricane Irene (2011)Mergers, Acquisitions and TakeoversCivil and Public ServiceConsumersPoliticsExelon Corp.

Baltimore Gas and Electric Co. will face questioning from state regulators over its response to power outages caused by Hurricane Irene after a chorus of criticism from angry customers and public officials.

The Public Service Commission, the state's top energy regulator, said it would hold hearings next month to evaluate the performance of BGE and other utilities in the state in the storm's aftermath.

The prolonged outages come as BGE's parent company, Constellation Energy Group, is trying to win regulatory approval of its $7.9 billion sale to Chicago-based Exelon Corp. from the PSC and federal agencies. The PSC is charged with ensuring that the merger would benefit ratepayers.

Meanwhile, BGE is tallying cleanup costs from the storm. Whatever the final figure, BGE ratepayers could bear the brunt of the bill.

The utility could try to recover storm-related costs by incorporating them into a future rate increase request before the PSC.

A Constellation executive said Thursday that the merger could help improve BGE's service.

"In addition to BGE's own assessment of what worked well and what could be improved in our response to significant events like this, the merger with Exelon will allow BGE to share best practices with two other leading utilities to continually improve reliability and customer service," James Connaughton, Constellation's executive vice president, said in a statement. Exelon owns utilities in Chicago and Philadelphia.

By Thursday evening, roughly 59,000 BGE customers remained in the dark. Power had been restored to more than 678,000 customers affected by Irene, the company said Thursday evening.

Some schools were expected to remain closed Friday due to the power outages.

BGE officials said they understood that customers' patience was wearing thin. The company reiterated its statement that power would be restored to most customers by Friday evening, with scattered outages remaining until Saturday.

"We recognize that the storm has impacted customers' daily lives," BGE spokesman Rob Gould said. "We're not going to be satisfied until we restore power to each and every customer."

But frustrations over prolonged outages mounted as residents questioned the utility's tree-trimming practices and accused BGE of poor communication.

Sarah Gardner, 78, said a BGE customer service employee told her Wednesday that power had been restored to her Carroll County home — when in fact she was still in the dark.

Gardner called the utility again Thursday morning and was told she should have electricity by Friday evening.

"When the power comes back [Friday night], I'll sing Hallelujah," she said. "I hope and pray that they get it done."

BGE officials said they didn't know the specifics of Gardner's case and would look into it, but they offered a possible explanation.

Chris Burton, BGE's senior vice president of gas and electric operations and planning, said when a feeder for an affected area is fixed, the utility's system indicates that power has been restored. But problems could still remain with the wire that connects the feeder to individual homes, he said.

BGE said more than 5,500 people, including linemen and contractors from other states, were involved in the restoration effort.

In Baltimore City, more than 6,000 customers remained without power Thursday evening. Baltimore County had more than 27,000 such residents. Anne Arundel County had 12,000, while Howard and Carroll counties had 3,500 and 3,800.

Electricity was restored Thursday afternoon to Marlin Steel Wire Products in South Baltimore, which lost two days of production, company president Drew Greenblatt said.

Greenblatt had a generator trucked in from Kansas for $3,000 and began operations at 40 percent capacity Wednesday morning. He estimates his firm lost $200,000 in revenue.

He feared the outage hurt the reputation of his company.

"This is Baltimore. We should have a top-notch electrical system," Greenblatt said. "I can't make delivery dates when BGE drops the ball."

The storm knocked down up to 7,000 power lines, BGE said.

Like other utilities, BGE follows an inspection and maintenance schedule for tree trimming and pole and line assessments. The company also conducts enhanced inspections when problems or concerns arise, Burton said.

But Jayn Osler of Timonium questioned whether BGE was adequately prepared.

Osler, whose power was restored Thursday morning, said she called the utility after she saw a company commercial asking residents to warn them about trees over power lines. But when she called BGE she was told the company would not do anything.

"When trees come down and bring down wires, we'll take care of it," Osler said she was told.

The PSC will look into how well BGE and other utilities prepared for the storm and how they responded to the widespread outages. The hearings are scheduled to begin Oct. 3.

In the meantime, BGE and other utilities are to submit a report on their response by Sept. 21.

Paula Carmody from the Office of People's Counsel, a state agency that advocates for utility consumers, said the PSC's inquiry could raise more questions about utilities' performance and trigger further investigation.

Carmody pointed to Pepco, whose slow response during the twin snowstorms of 2010 revealed the company's inadequate investment in and maintenance of its grid.

Three weeks after the hearing on BGE's response to Hurricane Irene, the PSC is scheduled to begin discussions on Constellation's sale to Exelon.

Baltimore Sun reporter Liz F. Kay contributed to this article.

Hanah.cho@baltsun.com

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