By Baltimore Business Journal

Baltimore Gas and Electric Co. officials have revised a ⿿smart grid⿝ plan state energy regulators rejected in June and are hoping to revive the project.

BGE has changed the way it will pay for the $800 million project in response to criticisms from the Maryland Public Service Commission that customers bore too much of the cost and risk under the original plan.

Instead of covering all of the cost through a surcharge on customersâ¿¿ bills, BGE has proposed raising 25 percent through the surcharge and 75 percent through its normal electric distribution rates.

The utility applied for a re-hearing with the PSC late Monday, and officials hope to get the project moving again â¿¿ if not fully approved â¿¿ by the end of July. If not, BGE stands to likely lose a $200 million federal stimulus grant from the Department of Energy â¿¿ and thus make the project more costly for the utility and its customers or kill it entirely.

The smart grid program would outfit all of the utilityâ¿¿s customers with high-tech electricity meters that allow two-way communication between the customer and the utility. That would allow for more precise and real-time information on electricity usage to promote less power consumption.

BGE officials were dumbfounded by the PSCâ¿¿s rejection of their smart grid plan. Theirs was one of few to receive the maximum possible stimulus grant for smart grid projects and on the cutting-edge of smart grid technology, they said.

The utility has been in close communication with the Department of Energy and has been given until July 30 to make progress on its plans or else risk the loss of its grant, officials with BGE and parent company Constellation Energy Group Inc. (NYSE: CEG) said. But the department did not require that BGEâ¿¿s plan be fully approved by that time.

James L. Connaughton, Constellation executive vice president for corporate affairs, public and environmental policy, said he thinks approval could be possible within the month but at least hopes to see some significant movement on the re-application.

⿿If there⿿s nothing said by July 30, I think we⿿ll be in a state of problematic limbo,⿝ Connaughton said.

BGE officials will now have to await the response of the PSC and consumer groups that had criticized its plans.

Copyright 2010 American City Business Journals

Copyright 2010