Brenda K. Pennington

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21 Νοε 2013 (πριν από 3 χρόνια και 10 μήνες)

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Brenda K. Pennington

Interim People’s Counsel, Washington, D.C.


OPC
-
DC is the statutory consumer advocate for
natural gas, electric, and telecommunications
consumers in the District of Columbia.



The Office represents D.C. utility ratepayers’
interest before the Public Service Commission,
Federal Energy Regulatory Commission, Federal
Communications Commission and other regulatory
bodies.


Litigation:
OPC
-
DC develops the agency’s overall
litigation strategies, including managing cases and
presenting them before regulatory bodies.



Consumer Education:
OPC
-
DC staff provides D.C.
consumers with general information and technical
assistance about current utility issues and trends.



Consumer Compliant Resolution:
If consumers have a
problem with their utility bill or service, OPC
-
DC staff is
available to assist with resolving the matter.


Our electric company, PEPCO, is in the process of
deploying smart grid at the cost of $85 million and 50% of
these expenditures are funded by the DOE from the ARRA
funds. The remaining balance will borne by D.C.
electricity ratepayers.



Once the Council approved legislation regarding PEPCO’s
deployment of the smart grid, OPC
-
DC still had one
concern.



According to the Harris Poll, two
-

thirds of Americans
have never heard of smart grid and about the same
percentage never heard of a smart meter.




OPC
-
DC’s concern was lack of PEPCO’s early consumer
education about how the smart grid will be deployed and
the benefits consumer can expect in the short term.



OPC
-
DC filed a petition with the Commission requesting
PEPCO delay its smart meter deployment until the
Company submitted its detailed consumer education,
media outreach proposal and budget. The Commission
rejected OPC’s petition.



RISKS


Consumers may not realize the savings from smart grid, if
the customers are not educated. Then the customers will
not only have to pay for the smart meters, but also for the
old meters which still have a book value of 70%.


All utilities have an obligation to serve, but some do not
deliver reliable service.



According to an article in
The Washington Post
, PEPCO
has one of the most unreliable electric distribution
networks the country.



Earlier this year, more that 56,000 customers lost power
due to a snow storm. Many customers remained out of
power for as long as four days.


In PEPCO’s most recent rate case, Formal Case No. 1076,
the OPC
-
DC proposed 25 basis point penalties on ROE for
poor performance, but our commission rejected on the
ground that the reliability is not an issue in this rate case.



Utilities don’t take reliability seriously
---

unless there are
heavy financial penalties.




RISKS


When power goes out, the electric companies lose some
revenue, but businesses and residential customers also pay
a heavy price.



PEPCO’s pension obligations are $1.9 billion and
pension assets are $1.6 billion.



In 2009, PEPCO requested the DC PSC recover $8
million because the market value of their pension plan
assets has fallen below the level required by SFAS
#87 due to 30% drop in the Dow Jones Industrial
Average.



Why should the ratepayers pay twice: once for the pension
plan and then for the risks take by the Company’s
management?



RISKS


The stock market can crash any time in the future. Why
should the ratepayers pay for the risk taken by the
Company’s management?


Renewable and clean energy from the existing sources may
be a noble cause and best for the society in the long run,
but it will come at a significant cost.



Many states have RPS and for the District it is 20% by
2020.



The ITC provisions of ARRA expired in 2010. According to
an article in
Public Utility Fortnightly
, Morgan Stanley
estimated that 20 to 25 projects , totaling 3GW of capacity
will be canceled for lack of equity funding when the ITC
cash
-
grants expire.


Does it make sense for each states to have its own RPS?
Or is it better to have one national standard?



Capital requirement to meet RPS and the transmission to
move the renewable energy is a huge challenge.



RISKS


Will the demand for renewable hold up with lower income
and high unemployment?



It is a new risk for utility companies when a government
tells it what to build and ratepayers to pay for it.


In 2009, in Formal Case 1053, the Commission approved a
BSA plan for PEPCO which guarantees the Company base
line revenue and allows the Company to adjust the “BSA
rider” to achieve the base line revenue.



The OPC opposed the Company’s plan.



By approving the BSA plan, the Commission reduced
PEPCO’s cost of equity by 50 basis points.



RISKS


The Plan does not give incentive for efficiency because
the Company is guaranteed for base line revenue and
in 2010, the BSA rider raised the rates by
approximately $3.5 million.



In the USA, we did not have nuclear generation for the last 30
years and the Obama has administration has proposed an
additional $36 billion in loan guarantees.



Standard & Poor’s said that the events in Japan, “renewed public
focus on the inherent risks of nuclear power that could led to
deteriorating economics for new plant construction.” WSJ March
23, 2011.



Rep. Markey thinks that after the Japanese meltdown, it is
important to revisit whether taxpayer subsidies for new nuclear
plants is a good idea?



RISKS


From a public safety point of view, there will be a lot more
scrutiny on the existing nuclear plants and on new nuclear plants
which will not only delay the construction of new nuclear plants
but will also increase the cost of nuclear energy in this country
and put pressure on all sources of energy.


Brenda K. Pennington

Interim People’s Counsel

bpennington@opc
-
dc.gov



Office of the People’s Counsel for the District of Columbia

1133 15
th

Street, NW, Suite 500,Washington, DC 20005

Phone: (202) 727
-
3071, Fax: (202) 727
-
1014

www.opc
-
dc.gov