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Your Take: Utilities Charging Customers During Outages!

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For residents in the Washington D.C. and Baltimore metro area, the recent hot weather was made worse when that big storm knocked out power. Hundreds of thousands of homes were without power, some for up to a week. I had a lot of friends who didn’t have power, thankfully most for just a day or two, but many people couldn’t run their air conditioning for up to a week.

As it turns out, Maryland power companies are still allowed to charge their customers for that time even though they didn’t have electricity. My friend Matt sent me this local news story about how Pepco and BGE, two local utilities, would be adding a “Bill Stabilization Adjustment” to the next bill. It won’t be much, just a dollar or so, but I think the principle is what people are most upset about. It’s not permitted in Washington D.C. or Virginia and in Maryland, it’ll be included into the “delivery fee” so we wouldn’t even know it was there.

What do you think of this? If they allowed this in your state, would you be upset?

On the one hand, it’s ridiculous to charge customers for service they never received but the company would get this revenue somehow. There are fixed costs associated with operating and maintaining the utility, independent of how much juice is sent out to customers, so I imagine either they charge a little more in a delivery fee now or just increase the price on contract renewal. It just looks ridiculous from a PR perspective.

What do you guys think?

{ 21 comments, please add your thoughts now! }

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21 Responses to “Your Take: Utilities Charging Customers During Outages!”

  1. Cole Brodine says:

    I an electrical engineer working for a electric utility in Nebraska. We have had outages before, due to extreme weather and have charged an extra fee to all our customers for a short period to recoup costs for rebuilding our system. The event was declared a national disaster and took out power to a large part of the state for multiple weeks.

    We have yet to have an outage due to extreme heat (where there would be no system damage).

    Maybe our saving grace is that Nebraska has an entirely public power system. (There are no investor owned electric utilities in this state. All electric utilities are an cooperative of some sort, so we are a non-profit power system)

    If anybody has questions about power systems, I’m happy to answer from my own perspective.

    • Scott says:

      Read carefully – the heat didn’t knock out the power, a storm did.

      • Cole Brodine says:

        It looks like the heat contributed some how? Their system must have been overloaded when a few lines went out, causing a cascading power outage?

        It is a bit harder for a for-profit company to ask for extra money. They maybe could justify it if the storm damage was widespread enough.

        If they are just trying to cover their fixed costs, then they probably have their rate structures a little messed up. They possibly would need to lower their per kwh rate and raise their customer service charge.

        • Texas Wahoo says:

          As a Virginia resident that lost power for 5 days, it was all the storm. The heat just made the power outage unbearable.

  2. mannymacho says:

    Maybe they should just have a small ongoing charge to everyone that covers the standard costs in case of outages (kind of like insurance). Then people won’t be wondering what is this “Bill Stabilization Adjustment” thing. I agree, it is very dumb from a PR perspective.

    • Anonymous says:

      MANY FAMILIES LOST alot. DAMAGE TO HOMES, CARS, LOST WAGES; and the power companies are going to bill the people for THEIR LOSS. Not one family should be charged one penny… if anything, they should be given a credit.

      Who can all of these families bill for their……”Stabilization Adjustment”. Families have lost a lot of money due to the long power outages.
      Families have lost wages because day cares were not operating; or businesses were closed, or they could not get out of their neighborhodds for days because of down trees. Families have lost hundreds of dollars per for food that was spoiled in refrigerators and freezers. All of this has to be replaced. OH…maybe families could BILL the grocery stores because there was no power.

      Can someone PLEASE tell me what aour Government and these companies are thinking. Why is it…that the families…the customers of are the ones that are always penalized, when they too have lost so much.

      To our Government and to the power comapnies…you should be ASHAMED.

  3. daemondust says:

    Maintenance, repairs and outages, even due to forces of nature, are costs of doing business. I have a rainy day savings, why don’t these utilities?

    • Billie Byard says:

      I agree with you….however….we can all now see that their customers are their rainy day savings. Stick it to their customers anytime they want. I looked at my BGE bill and under Distribution Charges….they won’t even tell you what is “clumped” together in that title. However….it does have “Other charges”….that must be for whenever they feel like sticking it to their customers.

  4. Aaron says:

    Good question. Since electricity is flowing to your house and electrical goods (even if you don’t have it “on”) – I would say that when the power has been cut-off, you no longer pay. The idea of a “bill stabilization charge” seems unfair. These costs need to be revealed upfront and not added on later.

    • daemondust says:

      This. They’re tacking on an extra fee because they didn’t plan ahead to be able to afford to fix what broke.

  5. Eddie says:

    Jim, a sizable portion of the reason for Pepco’s hike this time is actually exactly opposite of “fixed costs associated with operating and maintaining the utility”- it’s an attempt to recoup fees and legal costs associated with the companies deliberate lack of infrastructure maintenance and lack of reliability following similar but smaller scale outages in 2010.

    I’d feel a lot better about ponying up for the rate increase if I was more certain it would be used for the stated purpose- the purpose they’ve been promising to fulfill for years- of making a more reasonably effort to get past the “if it ain’t broke you don’t have to fix it, clean it, or even check on it” mentality.

  6. Ryan says:

    Don’t the power companies a lot of times estimate your usage based on previous month/year? So really you could be without power for half the month, but they just use an estimate, so you get charge no matter.

  7. thunderthighs says:

    Screwing people on their energy bills is a Maryland tradition. Seriously.

  8. zapeta says:

    As far as I’m concerned, if I don’t have service I don’t pay. If the cable is out for a day, I call them and expect a credit. I haven’t been in a long power outage in a while but I wouldn’t be expecting to pay for service when they provided none.

  9. Matt M says:

    Charging people for power they dont use should be illegal.

  10. Harold says:

    Completely agree! I am the king of complaining when a service that my money is funding makes me unsatisfied! I would raise some sort of hell if that was allowed in NYC.

  11. This is outrageous! Why would they charge honest and hardworking people for something that they did not use. What in the world happened to the freedom and the rights of consumers of having not to pay for goods and services they did not utilize at all. Good thing you brought this up. What were they thinking in the first place!!

  12. Wow, we lost power for more than a week after Hurricane Ike and I would have been majorly ticked off if I was charged while we had no A/C! It is bad enough to be without power…to be charged for it too would be the last straw…

  13. Miserly says:

    Maybe this is an extreme thought, but…
    If they just turned power delivery off to my home and left it off, could they charge me a stabilization fee forever? WOW, what a business where they do not provide anything but get to charge you for it.


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