Regulator has right to fine electric company Maryland electricity regulators have the right to fine Pepco for its tree-trimming because the electric company — after repeatedly blaming the region’s foliage for numerous prolonged outages — failed to cut enough trees to prevent electric outages, the Maryland Public Service Commission staff said Monday.
The failure to trim back the trees may have violated state law, PSC Deputy Staff Counsel Leslie Romine said.
The findings were announced in a brief filed Monday as part of the state’s investigation into the electric company’s lack of reliable service. They contradict Pepco’s claims that the company had not broken any state laws.
Pepco General Counsel Kirk Emge argued in a brief last month that the company’s performance “did not violate any standard or code,” but does show “room for improvement.” As a result, “penalties are inappropriate.”
Romine did not agree.
Although Pepco argued that it did not have the right to trim trees back more than two years’ worth of growth, Romine said the company was legally allowed to trim further. In fact, failing to cut enough trees caused Pepco to perform below legal standards, she said.
“Pepco’s assertion that it cannot be subject to penalties and mandatory spending requirements because [it] did not violate any current reliability performance standard is inaccurate,” Romine wrote.
However, in a brief filed Monday, attorneys for Pepco continued to argue that the company did not violate any laws or industry standards.
“Pepco’s storm restoration efforts were better than the industry norm and complied with good utility practices,” Pepco Assistant General Counsel Marc Battle wrote.
Although the law may have allowed Pepco to cut more, he said, customers wouldn’t have been happy.
But Romine said customers’ desires for Pepco not to trim should take a back seat. “Pepco needs to fully exercise its rights to tree cut when it has valid legal permissions.”
Pepco also took issue with standards used by Montgomery County and the PSC.
Montgomery County officials complained that Pepco has been ranked in the lowest quartile of electric distribution utilities nationally for the past five years. The ranking is “an unfair, impractical” way to determine quantitative standards, Battle said.
And the law the PSC cited is not an objective requirement, but rather “good engineering practice.”
The Office of the People’s Counsel — which represents Maryland residents — called that argument “a word game.”
“Such an argument is not only legally flawed but, if allowed to stand, would eviscerate the very essence of the commission’s authority to supervise and regulate public service companies and to enforce compliance with the requirements of law,” Assistant People’s Counsel Anne Johnson said.
The People’s Counsel recommended fining Pepco $14.7 million to compensate customers for their losses.
Pepco spokesman Andre Francis and PSC spokeswoman Regina Davis declined to comment on the briefs.
