PSC Orders Utilities to Improve Reliability & Infrastructure

In its Derecho storm decision issued on Feb. 27, the Maryland Public Service
Commission has ordered utility companies to improve the resiliency and reliability of the
electric utility distribution infrastructure in Maryland. The Commission’s order includes
specific directives aimed at making the utilities more responsive to outages that occur
after severe storms and more resilient to weather-related outage events, and directs
them to improve communications, review staffing levels and develop strategies to
address the needs of vulnerable populations.

Maryland was among several Mid-Atlantic states affected by the June 29, 2012,
Derecho storm, which caused extensive outages to customers of Baltimore Gas and
Electric Company, Delmarva Power & Light Company, Potomac Electric Power
Company, the Potomac Edison Company, Southern Maryland Electric Cooperative, Inc.
and Choptank Electric Cooperative.

At its peak, approximately 992,000 customers
across the state experienced outages. Fallen trees or limbs that interfered with
overhead distribution lines accounted for approximately 32 million hours of service
interruption. In its proceedings for Case 9298, the Commission reviewed the
performance of these utilities in the hours before, during, and after the storm; conducted
evidentiary hearings; and held eight public hearings.

Written and public comments expressed concern over recurring outages in certain areas, the lack of reliable estimated times of restoration (ETRs) and adequate staffing. As such, the Commission’s order creates a framework for developing and implementing substantive improvements.

Although the companies were not found in violation of the Public Utilities Articles or the
Code of Maryland Regulations (COMAR), the Commission did find “that a significant
and unsatisfactory disconnect exists between the public’s expectations of distribution
system reliability…and the ability of the present-day electric distribution systems to meet
those expectations.” The performance data regarding this storm and throughout the
year will be reflected in the Companies’ annual reliability reports, which they must
submit by April 1, 2013. The Companies are required to restore 95 percent of all
customer outages within 50 hours, as well as meet other objective standards described
in regulations.
In the order, the Commission directed utilities to develop plans to harden the distribution
system within five years, and to consider the suggested methodologies recommended
by Governor O’Malley’s Grid Resiliency Task Force.

Longer-term measures are also addressed in the order. For example, utilities must
undertake a comprehensive review of their respective systems to determine how the
duration of outages after all major outage events can be reduced to an acceptable level,
using a cost-benefit analysis. The Commission also ordered utilities to “perform a threepart analysis of its distribution system staffing: (1) an historical analysis; (2) a detailed
analysis of personnel dispatched during the Derecho; and (3) an assessment of its
Major Outage Event preparedness, based on current staffing levels.” These analyses
will include data on personnel who are able to restore service to 95 percent of
customers within a specified time frame. To help improve restoration times and
communications with customers, particularly people with certain medical conditions and
the elderly, utilities will participate in work group sessions with Commission staff to
develop a framework for the manner and type of information conveyed during
emergencies with respect to these vulnerable populations. A report detailing findings
and recommendations will be submitted to the Commission, which should include any
recommendations to change existing statutes or regulations.

Finally, the Commission will use its rulemaking authority to enhance communication and
reliability standards. To address the problems associated with restoration times, new
regulations will create objective standards to establish and update ETRs. With respect
to feeders, the Commission has ordered revisions to COMAR, noting that “requirements
to remediate poorly performing feeders should be strengthened so the effects of Major
Outage Events do not repeatedly recur in select areas.”

Order No. 85385 is available on the Commission’s website, www.psc.state.md.us, and
includes detailed descriptions and a schedule of delivery dates for reports from utilities and Commission staff.

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