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With the approaching first anniversary of the 2010 snowstorms that left hundreds of thousands in the region without electricity — some for 10 days — Pepco customers and legislators, from the county to the federal level, are blasting the utility for continued problems with reliability, particularly in bad weather.

The outages have forced restaurants and retail shops to close. Grocers have sometimes had to throw out spoiled perishable food. Research and manufacturing companies have ground to a halt.

A Montgomery County advisory panel is surveying businesses, trying to estimate how much Pepco's outages have cost them. Pepco — the Potomac Electric Power Co., owned by Pepco Holdings of Washington, D.C. — has proven to be more unreliable and slower to restore service than other utilities in surrounding jurisdictions, said Michal Freedhoff, a member of the panel, which is called the Pepco Working Group.

No one has calculated the outages' true economic costs to businesses and residences, but the survey may come up with an estimate, she said.

The working group, led by former Lockheed Martin CEO Norman R. Augustine, was formed by County Executive Isiah Leggett (D) in response to long outages last year. The two early February 2010 storms downed trees and power lines. A July 25 storm then knocked out electricity to more than 302,000 customers in Montgomery County. And last week's snowstorm again left hundreds of thousands of Pepco customers without electricity.

Calculating the cost of the outages is difficult, said Freedhoff, a county resident who works on Capitol Hill as a congressional aide on oversight issues.

"We're trying to segregate out that we're talking about just outage-related costs," she said. "If your workers couldn't get to work because the streets weren't plowed, that's different than if your electricity was out so you couldn't work that day."

Trying to calculate the economic losses is important because it will help put into perspective the amount Pepco plans to spend to improve reliability, Freedhoff said.

"It's something that is often overlooked," Freedhoff said. "When people talk about how much it costs to invest in reliability technologies and other improvements, sometimes they think of outages as inconveniences, but we think this survey will show these are quite costly for businesses."

The group's report initially was expected to be released by mid-April, but last week's outages have spurred momentum for completing the report by mid-March, she said.

‘A huge problem'

"In general, it's a huge problem," said Gene Burner, president of the Manufacturers' Alliance of Maryland, a trade group that includes members in Montgomery County. "When you're trying to produce a product, you can't do it when the power is out."

A Gazette analysis of reports that Pepco filed with the state Public Service Commission showed the utility's Maryland customers have experienced many more outages in the past two years than have nearby customers of Baltimore Gas & Electric and Allegheny Power, even when major storm-related outages are excluded.

In 2009, when there were no major storm outages, Pepco customers lost power about 61 percent more often than BGE customers and more than twice as often as Allegheny customers.

Pepco has come up with a $256.5 million plan to improve reliability for its Maryland customers, with the additional costs added to the electric bills if a rate increase is approved by the Public Service Commission. The increase would add an estimated $1 a month to customers' bills.

Patrick Donoho, president of the Maryland Retailers Association, said that every time a power outage closes a store, that is a lost day of sales that is never made up.

"If they don't have power, the registers don't work, the lights don't come on. And how do you tell people you're open?" Donoho said.

But it is hard to calculate the true cost of a storm-related outage because the bad weather would keep customers from going out anyway, Donoho said.

Peter Pagonis, owner of Mykonos Grill, a Greek restaurant in Rockville, said his electricity goes out during bad weather but sometimes even when the sky is clear because of what he called Pepco's outdated equipment outside his building.

One Mother's Day, for example, the power went out despite good weather, forcing him to close when he had 420 reservations for that Sunday.

After the Jan. 26 snowstorm, his power was out for four days until Pepco restored it, he said.

Pagonis thought the electricity would be restored the next morning, but it was not, leaving him uncertain whether to send employees home and cancel reservations.

"I had two parties scheduled for here that night," Pagonis said. "Do I cancel them? What do I do with my employees? What do I do with my customers? We've got upscale parties with customers, but do I get guidance? That's what is bugging me."

In the 13 years he has been at the location, he estimates he has lost $50,000 in business from power outages, he said.

‘Such a miserable record'

For restaurants and real-time service providers, a day lost in business from a power outage is not made up with double the business when it reopens, said regional economist Stephen Fuller of George Mason University in Fairfax, Va.

While outages seldom last long enough to significantly damage a region's economy, for a small business, such losses can be significant, he said.

"The reliability of Pepco is hard to understand," Fuller said. "The Pepco folks have such a miserable record and you'd think they would have gotten better after what happened last year."

Pepco spokesman Bob Hainey said he thinks the system is improving, and the fact that electricity was restored more quickly after last week's storm than following last February's is one sign of that improvement. Also, fewer customers lost power last week, he said.

"Over the next five years we'll spend another $100 million investment on service reliability," Hainey said. "We're about five months into that plan and we believe we already saw some benefits to that plan. We are committed to providing safe and reliable service."

Fuller said he believes enough political attention is being raised now due to the latest outages to prompt calls for new legislation for reliability standards.

Hainey said the utility does not oppose performance standards and is preparing comments to the Public Service Commission on the issue.

"We try to work with the businesses as best we can so that their service is reliable," Hainey said. "We understand the gravity of the situation when they lose power."

"Despite earnest promises, numerous press releases, and even a six point plan, families in our state went without service for up to five days. This type of failure is unacceptable," said Gov. Martin O'Malley (D) in a statement Wednesday announcing the introduction of the reliability standards legislation. "The people of our state deserve to have basic standards of reliability — standards to which they can hold their utilities, and standards that include financial incentives for the utilities to adhere."

Rep. Christopher Van Hollen (D-Dist. 8) of Kensington called for a change of leadership in a letter to Joseph M. Rigby, Pepco Holdings' chairman, CEO and president.

" ‘Enough is enough' — that is the collective sentiment of my constituents in Montgomery and Prince George's counties regarding Pepco's abysmal handling of the recent storm and power outages," Van Hollen wrote. "I share that sentiment. Simply put, Pepco's performance has been unacceptable. This latest episode is part of a continuing problem. After each episode there are hearings, briefings, reports and promises of improved performance, yet nothing seems to change. It is time to change the leadership at Pepco. Individuals must be held accountable, and shareholders should not be paid dividends until these problems are resolved."

Restitution fund?

Montgomery County Councilman Roger Berliner (D-Dist. 1) of Potomac called for the establishment of a restitution fund for customers after the Public Service Commission filed a notice to investigate whether Pepco was billing customers even during outages under its Bill Stabilization Adjustment provision.

"The commission has become concerned, however, that Pepco's [adjustment] may be allowing the company to recover revenues lost during extended outages, and thus may have unwittingly eliminated a critical incentive to restore service quickly," according to the commission's notice.

But not everyone in the Maryland suburbs is eager to see Pepco improve reliability.

Steve Tressler, manager at the Rock Bottom restaurant in Bethesda, said his business is connected to a Washington, D.C., grid, not Pepco's. That's because it's in a building formerly occupied by the Nuclear Regulatory Commission.

"We like it when the power goes out because everyone else goes black, but our power is still on," Tressler said. "But it does seem to go out whenever the wind blows around here."

cford@gazette.net

Correction: The photo information with this story originally spelled Mykonos incorrectly.