My Testimony to the Public Service Commission regarding Pepco

Here is the testimony I delivered to the Public Service Commission at last night’s hearing in Rockville:

Testimony to the Public Service Commission

By Nancy Floreen, President of the Montgomery County Council

August 30, 2010

Good evening ladies and gentlemen. My name is Nancy Floreen, and I am President of the Montgomery County Council. Thank you for coming to Montgomery County tonight to hear our concerns. Thank you also for the significant work you have already done in this investigation. I especially appreciate last week’s order directing Pepco to produce a large range of documents and prepare for a consultant to make recommendations to the Commission.

I’m submitting along with my testimony copies of the e-mails and letters the County Council has received from residents and business owners about Pepco’s reliability and communications.

You will find common themes in these letters and I’m sure in tonight’s testimony.

You will see in the letters that many Montgomery County residents face numerous small-scale outages even when there is no severe weather. One woman told me if a squirrel sneezes in her back yard, her lights go out.

There has been a lot of talk about the tree canopy causing problems, but I have to say we have heard from many people whose lines are underground that they experience problems too.

These outages are more than just an inconvenience to families. They create dangerous conditions for vulnerable populations. And they disrupt business, which means everyone’s bottom line.

You will hear my colleagues address this all in more detail.

We understand that there are acts of god and nature that Pepco cannot control.

But what we do not understand is why Pepco’s promises to improve their communication system after Hurricane Isabel were apparently never implemented.

What we do not understand is how the Public Service Commission could have allowed Pepco to fall into the bottom quartile for frequency of outages in good weather.

And what we do not understand is what standards you are holding Pepco to justify their rates.

We, as public servants, are obligated to fulfill our mission of serving the public to the fullest.

You are required, under the law, to “promote the adequate, economical, and efficient delivery of utility services.”

I ask that you take aggressive action to do that in this proceeding, because, in the view of Montgomery County residents, Pepco has unquestionably failed to meet these standards.

I ask you to set clear accountability measures, order Pepco to adhere to them, and order that Pepco be accountable to you for achieving them.

I appreciate voluntary standards, and Pepco’s own internal plans and statement of willingness to cooperate, but we want the Public Service Commission to be in charge of ensuring that Pepco meet its goals, not Pepco.

I understand that the Institute of Electrical and Electronics Engineers has come up with standards that many power companies are already using. They measure and provide a basis for evaluating:

the frequency of power interruptions;

the duration of interruptions;

and the percentage of customers who experience multiple interruptions.

I’m not an expert, but this seems to me to be a good place to start. I’d like to know how Pepco measures up compared with utility companies nationwide.

Then I would like to see these measures used as a part of considerations for future rate increases and Return on Investment levels requested by Pepco.

As a diverse and bustling community of nearly one million people, we absolutely must have reliable public utilities. I urge you to complete this investigation thoroughly and then to take aggressive and enforceable steps to make sure the lights stay on in Montgomery County.

Thank you.

Groundbreaking for Silver Spring Library

Join me for the groundbreaking for the new Silver Spring Library. This library will be a real gem right in the heart of Silver Spring, and I'm pleased that community members have been an integral part of the planning process since day one. The new library is designed to meet the unique needs of a diverse and growing community and to be a cornerstone of a very bustling area. It will be there not just to serve the community but to be an integral part of the community, and I think that’s pretty exciting. I hope to see you there.

Public Hearing on Pepco Reliability, Aug. 30

I encourage our residents to write to the Public Service Commission with their experiences and to sign up to speak at the upcoming public hearing. There must be a change in the way Pepco is held accountable for its service delivery failures. We need residents to tell their stories on how these continued power outages are impacting their lives.

The Maryland Public Service Commission (PSC) will continue its investigation into “the reliability of Potomac Electric Power Company’s (Pepco) electric distribution system and the quality of electric distribution service that Pepco is providing its customers” by holding a public hearing at the Montgomery County Council’s Stella Werner Office Building in Rockville at 6 p.m. on Monday, Aug. 30.

The public hearing will be held in the third floor hearing room of the Council Office Building at 100 Maryland Ave. Elected officials who wish to speak should contact the PSC’s director of legislative affairs by Aug. 27. Others wishing to speak must sign in at the hearing room starting at 5:30 p.m. Speakers will be limited to a maximum of five minutes. All attending must bring photo identification to enter the hearing room.

Written comments may be filed by Aug. 31. Originally signed comments on paper may be submitted to Terry J. Romine, Executive Secretary, Maryland Public Service Commission, William Donald Schaefer Tower, 6 St. Paul Street, 16th Floor, Baltimore, MD 21202. Comments must reference “Case No. 9240—Public Comment.” To ensure comments are entered into the PSC docket system, all comments must be mailed or hand-delivered. Comments sent via e-mail or fax will not be entered into the Commission’s docket system.

The public hearing will be televised live by County Cable Montgomery (CCM—Cable Channel 6 on Comcast and RCN, Channel 30 on Verizon). The broadcast also can be viewed via streaming through the County Web site at www.montgomerycountymd.gov.

Deeply Disappointed by Pepco's Responses at Hearing

I was deeply disappointed in the responses Pepco gave this morning in the first hearing the Maryland Public Service Commission (PSC) held in its investigation of the electricity provider’s reliability. Pepco officials were unprepared for many of the Commission’s questions, and it was clear the company does not have a verifiable plan for ensuring reliable service for the future. Today’s hearing proved that the PSC must establish accountability standards that will measure the performance of state utilities, including Pepco.

The PSC had ordered Pepco’s chief operating officer and the company’s senior officers responsible for system reliability and construction of maintenance, storm restoration and customer service and communications to appear at today’s hearing. The PSC is working on other aspects of its investigation, including a likely public hearing to be held within the next several weeks in Rockville.

I call upon the PSC to require a reliability plan from Pepco with accountability measures that Montgomery County residents can count on in the future. I also call upon the PSC to require Pepco to prepare an emergency communications and priorities plan. It is increasingly clear that Pepco's actions have been ad hoc, uncoordinated and undercapitalized.

The PSC announced on Aug. 12 that it would begin the investigation after morning and afternoon storms that day left more than 90,000 customers without power. On July 29, following a storm that left more than 200,000 residents without power, we at the Montgomery County Council unanimously sent a letter to the Public Service Commission asking for just such an investigation.

On Aug. 14, I spoke with Maryland Governor Martin O’Malley and told him that the continual series of outages year-round in Montgomery County has made establishing more reliable electric service from the utility a top priority.

We know that sudden winter and summer storms are not always predictable, but having a more reliable system established so we are not paralyzed by these events—and having a better system of response and communication with residents when they do occur—are things that must be addressed. After each of these events, we hear from Pepco about their challenges in delivering better service. Now it is time we hear a plan on what they are going to do to help prevent these problems.

Our letter of July 29 asking for an investigation cited many of the same concerns the PSC identified in deciding to act. In our letter, we wrote: “We are writing to ask the Commission to open an investigation into the reliability of electricity in Pepco’s Montgomery County’s service territory. Our residents and businesses have suffered an unacceptable number and duration of outages for many years, outages that have harmed public health, public safety and the County’s economy. As a distribution-only utility, the quality and reliability of Pepco’s service is exclusively within your authority. We ask you to invoke that authority to ensure our citizens of acceptable levels of reliability.”

Public Service Commission Investigating Pepco

The Maryland Public Service Commission has launched an investigation into Pepco's reliability problems. The Commission has ordered that Pepco management appear for a public hearing at 9:30 a.m. on Tuesday, August 17. The hearing will be broadcast on the PSC Web site.

I, along with all the members of the County Council, have been hearing from frustrated residents and business owners, particularly as power outages have stretched into days. I have been frustrated, too, as my house is dark right now and was out of power for four days after the big storm. While I recognize that Montgomery County presents an especially challenging problem for utilities because we have some of the densest tree cover in the nation (and we love our trees!), I can't help but wonder if there is a better way. That's why we sent a letter, signed by every member of the Council, to the Public Service Commission asking for the state agency's assistance. I’m glad to see the PSC’s quick response.

Disposing of Tree Debris

Trees or branches may be disposed as follows:

On Private Property:

• Tree debris on private property will be collected on a residents’ regular recycling day if it is no more than four-feet in length and four inches in diameter.
• Bag, bundle, or containerize tree branches and limbs, keeping bundles less than 45 pounds and less than 30 inches in diameter.
• Tree debris that is too large for curbside collection, or cannot be bagged, bundled, or containerized can be recycled at no charge to single family home residents (up to 500 pounds) at the Shady Grove Processing Facility and Transfer Station, located at 16101 Frederick Road, Derwood. Check the County’s website at www.montgomerycountymd.gov/solidwaste for hours of operation.
• Another option is to contact a private company, such a tree service, landscaping or lawn service, for assistance in removing and disposing of storm debris.
• Residents may want to check with their home insurance company, which may cover storm debris removal and disposal.

In the Public Right-of-Way:

• Montgomery County Department of Transportation crews are collecting trees and branches that have fallen into the public right-of-way.
• To report tree debris in the public right-of-way, call 3-1-1.

Comcast Outdoor Film Festival

Join me for the Comcast Outdoor Film Festival. This year, it will be my honor to introduce the movie on opening night.

The festival is celebrating its fourteenth anniversary August 13-20, 2010, with eight nights of hit movies that include a mix of box office hits, classics, family favorites. New this year, this annual summer favorite is moving to the grounds of the Universities at Shady Grove. As in the past, the Comcast Outdoor Film Festival is presented by 97.1 WASH-FM and benefits National Institutes of Health (NIH) Children’s Charities.

Over the past ten years the Comcast Outdoor Film Festival has raised more than $250,000 for NIH Children’s Charities.

The festival features an inflatable four-story screen, one of the two largest in the United States, and state of the art projection with Dolby Digital® Surround Sound. The films begin each night at dusk, grounds open at 6:30 p.m. Festival patrons are encouraged to come early to enjoy a variety of foods from local restaurants and family activities provided by the festival sponsors.

The 2010 Comcast Outdoor Film Festival lineup includes:

Friday, August 13 ~ The Blind Side ~ 129 minutes ~ PG-13
Saturday, August 14 ~ New Moon ~ 130 minutes ~ PG-13
Sunday, August 15 ~ Transformers: Revenge of the Fallen ~ 150 minutes ~ PG-13
Monday, August 16 ~ Jerry McGuire ~ 139 minutes ~ R
Tuesday, August 17 ~ Valentine’s Day ~ 125 minutes ~ PG-13
Wednesday, August 18 ~ Up in the Air ~ 108 minutes ~ R
Thursday, August 19 ~ Julie & Julia ~ 123 minutes ~ PG-13
Friday, August 20 ~ Cloudy With a Chance of Meatballs ~ 90 minutes - PG


Moviegoers are encouraged to purchase food at the festival from popular vendors and area restaurants. A portion of the proceeds will go towards NIH Children’s Charities: Children’s Inn, Camp Fantastic/Special Love and Friends of the Clinical Center.

The Comcast Outdoor Film Festival provides accommodations for people with disabilities. Wheelchair Access and Escort Service, seating area and restroom will be provided. Assisted Listening Devices of various types are provided at the projection booth and are available on request. AAudio Descriptors for the blind are available with ten days notice by calling 301-496-6061.

Moviegoers are encouraged to bring blankets or low beach chairs. The Universities at Shady Grove are located at 9630 Gudelsky Drive in Rockville, MD. Free parking is available. More information is available at www.filmfestnih.org or 301-816-6958.

Maryland Homeowner's Property Tax Credit

Eligible Montgomery County residents are encouraged to apply for the Maryland Homeowner’s Property Tax Credit program, which limits the amount of property taxes a homeowner must pay based on income. The deadline is September 1, 2010. In order to be eligible, a homeowner must have:
A combined household income of less than $64,000;
Lived in their home for at least six months, or will live in it for the next 12 months; and
A combined net worth (of everyone in the applicant’s household) of no more than $200,000.

To apply for the property tax credit program, eligible homeowners must fill out an application form each year. To get an application form, call the Maryland State Department of Assessments and Taxation (SDAT) at 1-800-944-7403, or download the form and instructions from the SDAT web site at www.dat.state.md.us/sdatweb/htc.html .

Joint Statement with County Executive on Fiscal Steps

Joint statement by Nancy Floreen and Ike Leggett:

The Great Recession has wreaked havoc on state and local governments nationwide, and Montgomery County is no exception. Plummeting revenues have forced many painful choices including pay freezes, furloughs, service reductions, and increased taxes.

This may be a "wake-up call" for some local jurisdictions -- but not to Montgomery. The work of putting Montgomery’s fiscal house in order – cutting unsustainable spending trends and responding to the economic downturn -- began several years ago.
But times remain tough, and in just the past two months we have taken five more decisive steps to meet our fiscal challenges.

Step 1. We passed a County budget unlike any other in County history. For the fiscal year that started July 1, the Executive Branch and the County Council closed a budget gap of nearly $1 billion, or about one-fourth of our total budget. We reduced overall spending by 4.5 percent, the first year-over-year decline in four decades. While this required a pay freeze and furloughs for our employees, as well as service reductions for our residents, we preserved our highest priority services in education, public safety, and the needs of our most vulnerable. We kept property taxes at the Charter limit, providing a $692 credit to all owner-occupied homes. The higher taxes we did approve, on energy and wireless phones, were just 17 percent of our total gap-closing plan. They were a last resort in order to avoid even more crippling cuts in critical services.

Step 2. We strengthened County reserve funds, which fell sharply as the recession deepened. Our new policy will gradually raise reserves to 10 percent of adjusted governmental revenue, greatly improving our ability to handle future downturns and confirming the historical excellence of our financial management.

Step 3. We pulled together all our agencies -- Montgomery County Public Schools, Montgomery College, the Park and Planning Commission, County Government, Housing Opportunities Commission, and WSSC -- to aggressively seek savings from joint interagency efforts in technology, utilities, benefits, procurement, facilities management, and other areas. We've also asked an expert group of County residents to propose more efficient and innovative ways to deliver County services.

Step 4. We are reexamining the County's structural budget challenges by analyzing the "cost drivers" that create spending pressures and the policy options to address them.

Step 5. We approved a six-year fiscal plan that outlines the spending limits needed to achieve balanced annual budgets. This will help us prevent future budget gaps and lessen the impact of severe downturns. It marks a new era in the County’s fiscal stewardship.

All these steps will help make us leaner, more productive, and better able to meet the needs of our one million residents. We have also taken important steps to expand the County’s tax base by approving the White Flint Sector Plan, the Great Seneca Science Corridor Master Plan, the nation’s first local biotech tax credit, and a new Montgomery Business Development Corporation.

Already these moves are bearing fruit. Just two weeks ago, all three bond rating agencies affirmed Montgomery County’s "Triple-A" bond rating with a "stable" outlook, which allows the County to borrow for future schools, road, and other construction needs at the most favorable interest rates -- saving County taxpayers millions of dollars a year.
One of the three agencies had put the County on a "watch" list due to the economic downturn and falling County tax revenues. Due to the actions we've taken, the County is now off that list -- and that's great news.

Our fiscal challenges are far from over, but these steps -- added to the work we’ve already done over the past several years -- will make our great County even stronger.