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Utilities: Aggression not enough, need more money

Wednesday - 7/11/2012, 12:38pm  ET

Execs.jpg
Executives from Potomac Edison and SMECO were in the studio. Pepco, Dominion, BGE, Novec and REC execs called in by phone. (WTOP/Paul D. Shinkman)

Ask the Utility Execs

Executives from SMECO, Potomac Edison, BGE, Pepco, Dominion, NOVEC and Rappahannock Electric Cooperative speak with WTOP

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Paul D. Shinkman, wtop.com

WASHINGTON - An aggressive approach to protecting power lines wasn't enough to withstand the recent derecho that left more than 1 million without power in the D.C. area, executives of seven local utilities tell WTOP.

Power companies trimming trees have made headlines in recent years, particularly after major utility Pepco blamed customer dissatisfaction on arboreal interference. These costs, combined with expenses for restoring extreme weather outages, add up quickly.

The utilities are left facing trees up to three times taller than adjacent power lines, and infuriated customers who don't want corporations interfering with leafy shade on private property.

"For every person who wants us to trim trees, we bump up against others who do not want us to trim trees," BGE's Bob Gould told WTOP on Wednesday's "Ask the Utility Execs" program.

"We have been aggressively trimming throughout the entire territory," he says. "New regulations allow us to be more aggressive in our trimming."

The same paradox is true for the other utility companies, despite their efforts to remove precarious branches that could take down wires. Spokesman Rodney Blevins says Dominion spends 2.5 times more on trimming efforts than in recent years.

Pepco spends $20-30 million trimming back trees, Region President Tom Graham says.

The severity of the sudden storm that ravaged the region in late June complicates the issue, BGE's Gould says. Before, utilities were focusing on branches. The derecho, however, uprooted 60-foot tall whole trees.

"You can't build a system robust enough to deal with (that)," says Tom Dennison with SMECO.

NOVEC's Stan Feuerberg, who grew up in the Midwest, says this derecho rivaled the kinds of tornadoes found in the U.S. heartland.

"This was greater than anything we've seen before," he says. "In a matter of minutes, we went from zero to 40,000 (without power)."

Many, including representatives from seven jurisdictions in Maryland, believe the answer to these outage woes lies in burying the lines.

"Now we have all seven major jurisdictions throughout the state of Maryland all in unison, saying we need a change," says Montgomery County Executive Isiah "Ike" Leggett about a two-page letter to the Public Service Commission calling on more accountability from utility companies.

The letter is signed by Leggett and the county executives of Anne Arundel, Baltimore, Harford, Howard and Prince George's, as well as Baltimore Mayor Stephanie Rawlings-Blake.

Utility leaders push back, however, saying the cost could outweigh the savings.

Graham says Pepco has studied "selective undergrounding" in the District and Maryland, and concluded it would cost $5.8 billion. For Dominion, it would cost $83 billion, or $3,000 per customer per year.

That's a tough sell for companies that are already charging customers for their restoration efforts in the immediate aftermath of the derecho.

SMECO is still calculating those costs and doesn't know yet how much it will charge customers.

"There's a lot of damage to the system," Dennison says, "a lot of poles and wires to put back up.

"That's a shared cost across all customers."

Customers are only beholden to these costs for the first 24 hours. That was put in to place to make utilities "whole" to increase efficiency, Graham says.

BGE's Gould says this is a bitter pill for many who still feel emotion about their extended outages.

Learn more about the derecho response from Pepco's Tom Graham, Dominion's Rodney Blevins, NOVEC's Stan Feuerberg, SMECO's Tom Dennison, BGE's Bob Gould, Rappahannock Electric Cooperative's David Kugler and Potomac Edison's Jim Fakult in our live blog:

10:56 a.m., speaking about what customers should do during outages:

Pepco: Every day during a major event, we conduct a call with government officials. Our first call in this event was for about 2 hours. 70-80 participate on those calls, and we describe our next steps.

The most effective way for customers to participate is to report outages through app, website or by phone.

10:55 a.m., speaking about rate increases:

Pepco: That process started a year ago for expenditures we've already made to improve reliability for customers.

10:53 a.m., speaking about getting reimbursed for power outage, or providing extra services:

Potomac Edison: It's a tough question. We don't for natural disasters like this.

SMECO: From our perspective, we try to get the most customers on and give people realistic restoration times.

BGE: This came on us quickly. There was no way to prepare.

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