ANNAPOLIS — The Maryland Senate gave initial approval to a bill that would require big utility companies such as Pepco to improve their electric service reliability or face massive fines.
“It is important for us to set reliability standards … and hold utilities to them,” said Sen. Brian Frosh, D-Bethesda. “You gotta have something significant to threaten utilities with … to make sure they do their jobs.”
| Also in Annapolis |
| • The Senate voted 27-19 to increase the state’s sales tax on alcohol from 6 percent to 9 percent over three years — adding roughly 30 cents to every $10 of alcohol sold by fiscal 2014. |
| • The Senate approved a budget that would impose more than $70 million in fees and require state employees to contribute more into their pension plans to help close a $1.6 billion budget gap. The Senate and House will have to work out the differences between the two versions before the General Assembly adjourns April 11. |
| • The Senate voted 34-11 to establish a public health exchange, a marketplace for the uninsured to buy health care coverage. The measure marks the first major step in implementing federal health care reform. |
The bill would require the Public Service Commission, which regulates utilities, to establish electric service reliability standards and impose million-dollar fines on companies that fail to comply.
“We have a problem and we have for too long just assumed that the Public Service Commission is going to go ahead and take care of this problem,” said Sen. Richard Madaleno, D-Kensington.
The standards would apply to service outages, as well as downed wire repair and vegetation management.
All Maryland utilities would be affected by the bill, but Frosh said Pepco — the utility that primarily serves residents of Montgomery and Prince George’s counties — was the impetus behind the legislation.
Pepco failed to restore power for up to several days to hundreds of thousands of Maryland customers after several storms in the past year, both in the summer and winter. An investigation into the utility’s storm response showed that Pepco ranks in the bottom fourth nationwide in terms of service reliability.
“We’re bringing to Maryland a Third World level of infrastructure,” said Sen. James C. Rosapepe, D-Prince George’s and Anne Arundel counties. “It’s an embarrassment to this country.”
The Senate approved changes to the bill Wednesday that would hasten the timeline for the Public Service Commission to design and implement reliability standards. The Senate also voted to increase potential fines from $10,000 to a maximum 2.5 percent of the utilities’ revenues — which would end up costing millions of dollars.
Sen. Thomas “Mac” Middleton, D-Charles County, said such steep fines could threaten Pepco’s bond rating, making it difficult for the utility to borrow capital and make needed improvements.
He also warned that utilities would pass the fines on to customers. “When you put the hammer to [the utilities], just remember one thing,” he said. “All the upgrades [for] those standards are going to be borne by the ratepayers.”
The Senate is scheduled to vote on the measure Thursday.
