Baltimore Gas and Electric Co. to proceed with smart grid implementation

Baltimore, August 16, 2010 — Baltimore Gas and Electric Co., a unit of Constellation Energy, will move forward with implementation of smart grid throughout its Central Maryland service territory.

“Following the Maryland Public Service Commission’s approval of our project this past Friday, BGE is pleased to move forward with our ambitious smart grid program and deliver the significant transformational benefits of smart grid to each of our 1.2 million customers,” said Kenneth W. DeFontes Jr., president and CEO of BGE.

Those benefits include at least $2.5 billion worth of savings for BGE customers over the life of the project, as well as new enhancements in customer service and reliability.

In addition, BGE will be able to take advantage of $200 million that the U.S. Department of Energy awarded BGE for its innovative program, reducing the cost of the project for BGE’s residential customers by 80 percent.

“Our decision to move forward also reinforces our continued commitment to helping the state meet its aggressive energy efficiency and conservation objectives under EmPOWER Maryland, and to enhancing the service we provide our customers,” said DeFontes.

BGE’s ability to invest the hundreds of millions of dollars in smart grid on behalf of its customers depends on predictability, certainty and fairness in being able to recover those costs.

In its order, the Maryland Public Service Commission found that the public interest is served by a decision to move forward with this initiative. The commission also assured BGE of its right to recover “prudently incurred costs” related to the project, as well as an appropriate return, and that its future review of costs will not be subject to “unfair, post hoc nickling-and-diming.”

BGE is further encouraged that the PSC accepted BGE’s proposal to conduct periodic reviews of project implementation on an ongoing basis, so that BGE and the PSC can more constructively work together to ensure that ongoing project implementation is meeting expectations and enable mid-course corrections, if needed.

“We strongly believe that a gradual, annual phasing-in of both the benefits and costs of smart grid is the best approach for our customers and the company,” added DeFontes. “Although the commission chose a different regulatory method than we proposed, we will work with the commission to find ways to better align the benefits and costs of the project while mitigating the potential for a rate spike at the end of deployment.”

The PSC also approved BGE’s general plan for long-term, customer-focused education and communication surrounding smart grid. Building on experience gained through its highly successful smart grid pilot program and from utilities nationwide, BGE will devote the necessary time and resources to ensure that all of its customers, including limited-income customers and senior citizens, have the information they need prior to each phase of smart grid implementation.

BGE is developing the appropriate metrics to ensure the success of its outreach effort.

In addition to the energy-management and energy-savings benefits that smart grid affords BGE customers, the company projects the added economic benefit of an estimated 350 direct jobs and more than 1,300 indirect jobs related to implementation of smart grid.


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