Tuesday, August 17, 2010

Smart Grid, Shrewd Politics

This week, the Maryland Public Service Commission approved BGE’s plans to deploy “Smart Grid” technology across Maryland, ending a saga which began in June.

Smart Grid technology allows consumers to better track and control energy usage, resulting in significant energy and cost savings. The PSC’s action preserves Maryland’s eligibility for $200 million in federal stimulus grant monies earmarked for Smart Grid projects.

The whole Smart Grid saga has received significant local media attention during the past two months. Absent from all the coverage, however, was the extent to which gubernatorial politics guided the outcome.

Flash back to 2006, when BGE customers were hit with 70 percent rate increases. Then-Mayor Martin O’Malley used the issue as a weapon in his contest again Governor Bob Ehrlich. O’Malley assigned all blame for the rate increase to Ehrlich and the members of his Public Service Commission, promising to roll back the increases if he won. And, he got away with it.

Of course, Governor O’Malley and his own Public Service Commission failed to deliver on these promises.

Now, as Governor O’Malley fights to keep his job, his overpromising remains an area of vulnerability with voters. However, with jobs and the economy dominating the agenda, it’s doubtful that lingering angst over a four-year-old rate increase will determine the election outcome.

That is, unless new developments reignite voters’ anger – as the inconvenient emergence of the Smart Grid issue right in the middle of the 2010 election cycle threatened to do.

The $835 million plan BGE submitted to the PSC in June – which the PSC rejected – called upon ratepayers to shoulder most of the upfront costs.

The PSC’s rejection allowed the commissioners to position themselves as pro-consumer watchdogs, inoculating Governor O’Malley from charges that he presided over another de facto looming rate increase for BGE customers.

But the plan passed by the PSC in August does not insulate consumers from the cost of Smart Grid. It merely prohibits BGE from recouping Smart Grid costs – an estimated $1.10 per month per ratepayer over the course of 10 years – until 2014 at the earliest.

In effect, the PSC skillfully punted the Smart Grid issue down the road and out of the 2010 cycle.

And, no one in the media or the GOP called them out on it.

The PSC’s initial protests against Smart Grid were calculated and misleading, a transparent example of partisan regulators grandstanding for voters. But it also represents shrewd political gamesmanship in a competitive election year.

Like they did in 2006, the Democrats manipulated facts and circumstances to deflect the political fallout resulting from a potentially damaging energy rate increase. And, like they did in 2006, they will probably get away with it.

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