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FOR IMMEDIATE RELEASE
April 19, 2023 |
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People’s Counsel Applauds Public Service Commission Ruling on Energy-Efficiency Program Cost Recovery
BALTIMORE – Residential customers stand to benefit significantly from a Public Service Commission order this week addressing how utilities recover the costs of their energy-efficiency programs, according to the Office of People’s Counsel.
The Commission’s order reaffirms its December 2022 decision addressing a balance of more than $800 million in “EmPOWER” energy-efficiency program costs carried by electric and gas utilities. This balance, which arose from a 2007 Commission decision to spread program costs over time, is now costing customers about $56 million a year in carrying charges. The order requires a timely and prudent pay-down of this balance, and also changes the way the costs of the utility-run energy-efficiency programs will be paid in future years. Starting in 2024, EmPOWER will be transitioned over three years to a model in which costs are recovered by utilities in the year in which the program spending occurs. Utilities will not be allowed to carry a profit-earning balance on new unrecovered costs.
“This decision will save customers hundreds of millions of dollars in the long term by eliminating the huge weight of a growing $800 million balance that customers have been carrying,” People’s Counsel David S. Lapp said. “The ruling also promotes the public interest by phasing in the pay-down as the utilities move to a cost-recovery approach beneficial to customers.”
The Commission’s order rejected an effort by several utilities—those owned by Chicago-based Exelon Corp., including Baltimore Gas & Electric, Pepco, and Delmarva Power—to have the Commission reverse an earlier order. The order cited several points OPC raised in opposition to the utilities’ request. The order found that the Exelon utilities’ preferred alternative proposal would unnecessarily guarantee the utilities a return on their energy-efficiency spending, cause dramatic increases in rates, and reduce the transparency of what customers pay for the energy-efficiency programs.
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers of electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies and the courts.
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