Pepco Work Group Sends Recommendations To Leggett

Investing in system maintenance, communication operations and government oversight to align financial and community interests, were among the recommendations that the Pepco Work Group made in a final report submitted to County Executive Ike Leggett on Tuesday.

The 192-page report includes 30 recommendations for Pepco, six for local governments and 20 for the Maryland Public Service Commission, and covers key issues such as vegetation management, communication and financial interests.

"Our report contains an Executive Summary that, in brief, recommends that the Maryland Public Service Commission establish stringent standards and utilize its authority to impose remedies sufficient to align Pepco’s financial interests with the interests of the community," wrote Norman Augustine, who was appointed as chair of the Pepco Work Group. "Pepco should be measured against publicly-disclosed best-in-class performance, should adopt industry best practices, and should proactively seek continual improvement. In support of this, the State should assure that the PSC is appropriately staffed to implement such a process."

The 11-person group, appointed by Leggett in October, included representatives from local businesses, utility industries and , in addition to Augustine. Over seven months, the group held 10 group meetings and 24 subgroup meetings and met with executive leadership of Pepco, Pepco Holdings, Inc. and Baltimore Gas & Electric, according to the report.

The Pepco Work Group also conducted an online survey of nearly 12,000 Montgomery County residents in January and February. The following results of the survey were included in the report.

• Nearly 95 percent of residents who completed the survey reported experienced at least one outage of more than five hours in the past year.
• Of those who experienced an outage, almost 65 percent reported calling Pepco more than twice to report the outage.
• More than half of those surveyed said they lost power during a non-major event during the past year.
• Outages cost residents between $22.90 and $114.60 in the past year and businesses between $21.10 and $211 in the past year.

According to the report, 136,695 Montgomery County residents lost power during the . Nearly 80,000 residents lost power during severe thunderstorms in August 2010.

While the report acknowledged the six-point "Reliability Enhancement Plan" was constructive, the group concluded it was short in meeting the need.

The Pepco Work Group made eight principal recommendations to Pepco on how to improve power service in Montgomery County.

1. Pepco should adopt, fund and execute a multi-year plan for system inspection, maintenance and enhancement.
2. Pepco should invest in outage monitoring systems.
3. Pepco should adopt industry best practices.
4. Pepco should upgrade human and automated communication processes during major and non-major event conditions.
5. Pepco should ensure sufficient personnel are available to carry out preventative maintenance and to restore service during outages; work with Montgomery County to carry out effective vegetation management.
6. Pepco Holding, Inc. should establish an ombudsman to report to the CEO and Chairman of PHI to create a more customer-oriented culture.
7. Align Pepco’s financial interest with the interests of the community.
8. Ensure the Public Service Commission has sufficient personnel with special expertise to properly oversee Pepco operations.

 “Stable and reliable electricity service is something everyone who lives and/or works in Montgomery County should be able to take for granted,” Leggett said in a press release. “That has not been the case for some time. It is why it is imperative that we all continue to work together to make sure that Pepco re-establishes itself as a utility that provides stable, reliable and affordable service to its customers. This report will give us a foundation for doing just that.”

Montgomery County Council Vice President Roger Berliner commended the group on the report.

"The Working Group report is an indictment of Pepco," Berliner said in a release. "What this report makes clear is something that our citizens know all to well, their performance has been unacceptable and has adversely affected our quality of life and our ability to attract and hold businesses. Our community deserves nothing less than a best in class utility and it is the job of the Maryland Public Service Commission to make sure we get it.

"The report appropriately recommends that the single most important action that can be taken by those outside the company is to establish a carefully considered, aggressive package of financial incentives and punishments that appropriately align Pepco’s priorities with those of the community. I look forward to working with Governor O’Malley and the Public Service Commission to see that happen."