MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. Later on the broadcast, the threat facing bananas and the controversial proposed strategy to combat that threat. But first, as you turn up the heat against the biting cold of another Washington winter, are you dreading the day the bill arrives from the power company? Unbeknownst to many, while we individuals try not to break the bank in order to stay warm, a team of lawyers in Baltimore is keeping an eye on utility bills statewide. The Office of People's Counsel is a state agency with an unusual mission -- to champion the interest of residential utility customers in state and federal proceedings. Those proceedings include debates over rate hikes, agreements over where transmission lines will be laid, decisions about who we can buy our power from and -- the hot topic of the day -- complaints from PEPCO customers about frequent and lengthy power outages. Joining us in studio is Paula Carmody, people's counsel for the state of Maryland. Paula Carmody, thank you for joining us.

MS. PAULA M. CARMODYWell, thank you, Kojo. I appreciate your inviting me onto your program.

NNAMDIAnd we invite our listeners to join the conversation by calling 800-433-8850, by going to our website, kojoshow.org, by sending us a tweet, @kojoshow, or an e-mail to kojo@wamu.org. For listeners who are not familiar with the People's Counsel, please explain your office's mission. You're the official state advocate for residential utility customers.

CARMODYThat's right, Kojo, and I would guess that most people don't know that our agency exists. It's been around, actually, since the 1920s, very unusual. We were the first in the country to have a consumer advocate office, and our mission is written into the law, and our responsibility is to represent residential consumers of utility services. And these include gas, electricity, telecommunications that are regulated at the local level and also private water companies. There are some of these that exist in the state of Maryland. And so we represent consumers that receive their services from PEPCO, Washington Gas Light Company, Southern Maryland Electric Coop, for example, BG&E and other utilities throughout the state of Maryland.

NNAMDIWe've been hearing a lot. Let's cut to the chase. We've been hearing a lot of complaints from PEPCO customers about frequent and lengthy service interruptions. The state Public Service Commission is investigating PEPCO's performance. What role is your office playing in that investigation?

CARMODYOur agency is an active party in that case, and just to let our -- the listeners know, any time the Public Service Commission sets up a case involving or impacting residential customers, our agency is there on their behalf. So we represent PEPCO residential customers in that case. And in terms of what we do, right now, the commission has authorized an independent study of the circumstances around the outages and the reliability issues. We expect a report to be released in March of this year, and we have already retained an expert consultant that will be taking a look at the report. We will be submitting our own expert testimony in the case, and, of course, our lawyers will be present at the hearings that will take place in June of this year.

CARMODYSo we are very much at the table, and we will be conducting our own independent assessment not only of the report from the commission consultant but certainly the information from PEPCO. No doubt about it, you know, things have kind of fallen apart not only with regard to storm outages, but I think one of the things that came out of the conversations particularly in the summertime were the chronic problems that people noted, the so-called blue-sky outages.

CARMODYI was at the Rockville hearing and listening for several hours to many of our Maryland residents talking about in many ways the problems with these, as I say, the blue-sky outages, the chronic outages. And we do need to, number one, figure out what the problem is. Number two, figure out a plan to rectify those promptly and get us -- ourselves on a better path to ensure reliability, because there are two things that our consumers are concerned about, reliable service and certainly affordability.

NNAMDIPaula Carmody is people's counsel for the state of Maryland. If you have concerns about your utility bills, have rate increases given you pause, now is the time to call 800-433-8850. The Office of People's Counsel helped convince state regulators to reject the proposal by Baltimore Gas & Electric Company to install smart meters throughout Maryland. What are smart meters, and what were your objections to the plan?

CARMODYWell, smart meters are basically more digital two-way communication tools, and these are devices that will replace existing meters in households, not only in BG&E territory but also in PEPCO's territory as well. Our objection is not to new technology. What we had objected to really was the proposal that BG&E had on the table not only for a very rapid deployment but also the way that they wanted to recover cost from our consumers. Bottom line is they wanted a guaranteed upfront recovery of costs from our residential customers as they were installing over a million electricity meters and over 700,000 gas meters into our residential customers' homes.

NNAMDIWell, BG&E, I guess, would say, look, we're installing these at a cost, why should we not want some upfront money from our customers?

CARMODYWell, our view was, don't treat these meters as anything different than the way they recover their cost for all sorts of other hardware and assets and quite simply the way that they do that is through our regulated distribution rates. And we were able to convince the Public Service Commission that this was the right way to go, that they should not allow the deployment to take place under this cost recovery proposal, and, as I say, the commission agreed with us. And bottom line is BG&E backed off their original proposal. They will be deploying the smart meter program and putting these meters into our customers' homes, but they also have to develop a comprehensive education program.

NNAMDIThat was the problem with the speedy rollout. You didn't feel there was enough of an accompanying education program to alert customers about exactly how this would be used?

CARMODYOh, there was almost no education component. Right now, what we are doing is participating in a workgroup that is still moving forward, and we are developing a more comprehensive education plan, predeployment during deployment and after deployment to help people understand what the meters do, what they don't do. And we feel that this is very important. Some of your listeners may have heard of some problems out in the state of California...

NNAMDIMm-hmm.

CARMODY...and also in the state of Texas, where basically deployment took place and people did not understand what was going on. They began receiving very high bills for -- in many cases, unrelated reasons, that is unrelated to the deployment of the meters and got very angry and upset. Also, people have some concerns about possible health-related issues that have come up in some other states. And so clear, transparent information is really critical if this is going to move forward.

NNAMDIYou know, culturally, that is significant because when we get bills from our utilities these days, the only thing we seem to understand clearly are the rates, are the prices or the costs to us, because so much of what we see on our utility bills looks, frankly, like gobbledygook that we don't understand that would really alerts us that something is going on, that something is changing, is when our bills go up significantly. And so the call for educating people about smart meters seems like a no-brainer.

CARMODYIt does, but it really has taken, I would say, the -- two years to bring everybody up to speed. We've been talking about BG&E, but, in fact, what we're talking about also applies to PEPCO in Montgomery County and Prince George's County as well. And I do understand that these issues are being addressed in the District of Columbia. Education has not been a real focus, you know, certainly in the past. And one of the things that our agency, but also consumer advocates across the country, have brought to the attention of federal regulators and state regulators as well is that this, in some ways, can be kind of a sea change for consumers.

CARMODYAnd looking forward, it's not only that we're putting in new equipment, but new equipment that, as I said, has two-way communication. There are issues that will come up that don't exist with our old meters, so to speak, you know, the analog meter that's kinda stuck on the side of your house...

NNAMDIOh, yeah.

CARMODY...inside your house. As an example, some of the complicating factors that we're talking about right now have to do with privacy issues because we're going to be sending -- receiving information and sending information from our household, and this will be in, you know, little bits of information about our energy usage. And so some questions have come up. Who owns the information? Who owns the data? Who has a right to turn it over to a third party? Do you need the consent of the customer to do that? Is there sufficient safety in terms of protecting the information, whether it's from hacking or from, as I say, turning it over to third parties without consent from the customer.

CARMODYSo these are new issues. There are ways to resolve them, but we want to be sure that our residential customers, number one, know what's going on, and number two, have their interests protected as we move into a new technological age.

NNAMDIOur guest is Paula Carmody. She's people's counsel for the state of Maryland. We're inviting your calls for Paula Carmody at 800-433-8850. What questions do you have about your electric or gas rates? 800-433-8850. Or you can send us an e-mail to kojo@wamu.org. You mentioned that we were just looking at some of these issues in the District of Columbia, and in the past, we've had the D.C. People's Counsel in here, especially when Elizabeth Noel, was in that position for a long time. But a lot of people, as you said, in Maryland might not even be aware that there is a Maryland people's counsel. How common is the Office of People's Counsel in states around the country?

CARMODYRelatively common. I would say about 40 states out of the 50 have an equivalent agency or office that does the type of work that we do. About half of them are independent agencies, like the D.C. People's Counsel and Maryland's office. Many states have a unit inside their attorney general's office that provides this consumer protection. And some states, actually, work through some nonprofit agencies to do similar work. So -- particularly since the 1970s when we had the fuel issues and certainly the embargo, the oil embargo that people may remember, many states set up the offices at that time. And we are unique because we do have a single mission to represent, you know, in some -- most cases...

NNAMDIBecause you're...

CARMODY...residential consumers, some states expand it to include commercial customers or agricultural customers as well. And it really -- it's unusual to have a consumer advocate position inside, say, state government.

NNAMDIWe have a caller, Eric in Washington, D.C. Eric, you're on the air. Go ahead, please.

ERICHi there. I was just wondering when you listed the interests you were seeking to protect, you mentioned keeping rates low and keeping reliability high. But I have a personal interest, and I think our nation has an interest in the environmental impacts of how energy is generated and distributed. And I was wondering whether, in your sort of job description, you were always set against those environmental interests if they, for example, had a cost impact.

NNAMDIPaula Carmody?

CARMODYI don't think that we're talking about setting ourselves against environmental interests. I think what I'm talking about is sort of what is our primary mission under the law, which is to protect our residential customers. In many instances, there are areas of overlapping interest. For example, the Maryland Office of People's Counsel, for 20 odd years, had promoted and supported the development of energy efficiency programs. We have supported the integration of renewable programs, and I supported the renewable portfolio standard as an example. So these are areas where you have overlapping interest, I think, among in the environmental communities, people interested in clean energy. But we have to focus on it also as a way to deliver more affordable and reliable energy to our consumers.

NNAMDIThank you very much for your call, Eric. We've got to take a short break. If you have already called, stay on the line. We will get to your call when we come back. If not, you can also go to our website, kojoshow.org. Or send us a tweet @kojoshow. We're gonna take a short break. When we come back, we will be continuing our conversation with Paula Carmody. She is the people's counsel of the state of Maryland. I'm Kojo Nnamdi.

NNAMDIOur guest is Paula Carmody, the people's counsel for the state of Maryland. We're inviting your calls at 800-433-8850. Have you had an experience with PEPCO, Washington Gas, Baltimore Gas & Electric or another utility company that you would like Paula Carmody to hear about? Call us, 800-433-8850. Let's talk about natural gas. How have the recession and new drilling for natural gas affected demand in the last couple of years?

CARMODYYes. It's somewhat interesting with what's been happening with natural gas. If we go back a couple of years ago, say, to the winter of '08, many customers who used gas for heat would have seen very high prices for gas on their gas bills, say, if they were served by Washington Gas Light or BG&E. Some -- a couple of interesting things have been happening over the last couple of years. Unfortunately, one is related to the recession and the not recession that we're in right now. Demand for energy has gone down. And I think people understand that, particularly, you know, in terms of commercial use, industrial use but also among our residential customers. In addition to that, there has been an expansion in supplies available at the domestic level, and when I say domestic, I'm talking about within the United States. And a lot of this is related to basically drilling that's going on in these Marcellus Shale areas.

CARMODYSome of your listeners may have been reading about drilling in areas in the state of Pennsylvania and the state of New York. We do know that some companies are coming down into our Western Maryland area, looking to do some drilling in this shale area. And what this simply has done is expand significantly the availability of gas. And so as the supply is expanding, and as we're looking out into the future to see that expanding, the price of natural gas has actually gone down certainly from where you saw it two years ago, where, you know, we saw it hitting some real peaks.

CARMODYSo this has had some direct impacts, actually some good impacts for our residential customers and, certainly, commercial customers basically seeing that unit price go down. But it also has had some implications in the electricity arena because the gas -- as the gas price has gone down, it has affected discussions about construction of nuclear power for example. And also, you know, what the cost of gas generating plants is versus running coal plants. So we're entering into a whole new discussion as we're looking forward into how do we meet our electricity needs as well as our gas needs.

NNAMDISpeaking of how we meet our electricity needs, Dave in Hagerstown, who couldn't stay on the line, sees companies coming around saying they supply electricity. How do they fit in with PEPCO? What about rates, they say they -- they say that are lower? Is it a scam? Most people buy their electricity from the public utility company. But an increasing number of other companies are offering alternative power contracts. I see a lot of ads on my TV now for companies saying, we can offer backup electricity, alternative power. What advice do you have for people considering shopping elsewhere for electricity?

CARMODYOkay. Just to give a little bit of background, what Dave is talking about are the entry of retail energy suppliers into the market place. This is a result of a change in law in Maryland that took place back in 1999. But frankly, we've been seeing much more activity in the last 12 to 15 months. Bottom line, these are companies that must receive a license from the Maryland Public Service Commission in order to either market or sell electricity or gas, if they are not your regulated company. So there are companies, if they have a license, they're authorized to do this. But like any product or service, we always encourage people to follow general consumer protection rules, know who you're dealing with and get the information upfront.

CARMODYJust to let your -- all of our listeners know, all of Maryland's consumer protection laws, and these include the Telephone Solicitation Act, the Door to Door Solicitation Act and the Consumer Protection Act, apply to all of these marketing of services by suppliers. So we do have protections in place but the biggest protection is to, number one, ask questions including getting the license number, getting the identification information from the person that you're dealing with, and go through the contract very carefully. What we're finding is that, number one, many individuals who are approached by marketers, for example, are confused about price information. They're not aware that there can be hefty cancellation fees and, in fact, someone contacted our office just last week, who was charged with a $700 cancellation fee on a three-year contract. So...

NNAMDISo one has to be careful of who you're dealing with in this situation.

CARMODYThat is exactly right. And what I would encourage people to do is, number one, get information about the licensing from the Maryland Public Service Commission and can go on their website at www.psc.state.md.us. Also on our website, the Office of People's Counsel, you can get price comparison information for suppliers and we also have a contracting guide, which will kind of walk through the types of questions that you should be asking of a supplier, and you can find that at www.opc.state.md.us.

NNAMDIopc.state.md.us. We'll try to provide -- I'll make sure we provide a link to your website.

CARMODYOkay, that'll be great.

NNAMDIOnto Tim in Washington, D.C. Tim, you're on the air. Go ahead, please.

TIMYes. I have two questions. One is regarding reporting outages. PEPCO in D.C. continues to require you to give them a bill number when you're reporting an outage. And given that I have a building in the MacArthur Boulevard area, which is out every time there's a storm, this is a difficulty. I think they should just take the address and move on rather than making you go look up your bill number, which is an obscure number on top of your bill. That's one. And the second...

NNAMDIWell, frankly, I've noticed that. Allow me to have Paula Carmody respond to that specific.

CARMODYOkay. One thing I do want to know is if this is in the District of Columbia, it -- you know, probably have some different processes in Maryland versus the District. So I would suggest, number one, that that question be addressed to the D.C. Public Service Commission or the D.C. Office of People's Counsel for any property in the District of Columbia. Certainly, in the state of Maryland, some of the things that we are looking at are communication issues with regard to outage information and how PEPCO in the state of Maryland and Montgomery and Prince George's County is collecting information and responding to it.

NNAMDIThank you very much for your call, Tim. We got this e-mail from Michael in Takoma Park. "I support the mission of the People's Counsel but I wonder if you always oppose all rate increases for all reasons or if you think there are some legitimate reasons for rate increases, such as to pay energy utilities for the cost of buying renewable energy and energy efficiency."

CARMODYWell, we do believe that our job as an advocate is to examine very carefully any proposal by a regulated utility for an increase in their rates. And so, when we're talking about distribution rates, for example, and PEPCO has had -- filed twice in the past two years in the state of Maryland, and we're expecting another filing come this spring.

NNAMDIMichael wants to know if you have a knee-jerk reaction of opposition.

CARMODYWhat we do is retain our own independent consultants and these are accountants and economists and they plow through the information provided by PEPCO. And I would say we do not have a knee-jerk reaction. What we have is a reasonable reaction to the request. And, yes, frequently, we will come in and say we do not agree with the proposal from the utility. They may be entitled to no increase, but in many instances, what we're saying is they may be entitled to a lower increase than what they're requesting. And this is for the distribution rates. And those rates are fully regulated and those are the rates that are paying, basically, for the infrastructure.

CARMODYWe also do get involved in what are called energy supply issues. Those are -- some are also regulated by the Public Service Commission. But many issues with regard to including renewable energy are set out in legislative public policy. We're talking about renewable portfolios standard, which applies to everybody. We've been supportive of that. We're very active with energy-efficiency programs, including those of PEPCO. So, bottom line, we don't have a knee-jerk reaction, but PEPCO has lots of lawyers, lots of staff on board, and we believe it's our job to hold their feet to the fire, so to speak, and make sure that our customers only pay what is a reasonable amount.

NNAMDII'm glad you mentioned legislation, because I'm thinking of delegates in Annapolis. Your predecessor as people's counsel left the job after lawmakers in Annapolis called for her ouster for not having done more to prevent the Baltimore Gas and Electric rate hike. Is the position of people's counsel becoming politicized? Is it already politicized?

CARMODYWell, I think you have to say that these issues are very important, obviously, to residential households, and the customers are voters and constituents, and it’s a, you know, these are big bills that people have to pay. So the members of the legislature are always keeping an eye and ear out for these issues. I would say, certainly for the last five years or so, you've seen a heightened interest in the legislature from the governor's office in the issues that we have to take a look at.

CARMODYBut in terms of how I conduct my practice or how our agency works on behalf of residential customers, one of the values of an independent agency is that we take a look at these issues seriously, and independent of -- certainly, perspectives, you know, from other quarters. And it's our job to kind of look at them from the point of view of the residential consumer and act on their behalf. We act within a political environment, but we have to act independent of political concerns.

NNAMDIPaula Carmody is the people's counsel of the state of Maryland, not concern about politicians looking over her shoulder. Thank you very much for joining us.

CARMODYThank you very much for having me.

NNAMDIWe're gonna take a short break. When we come back, the threat facing bananas, what's being done about it and why that's controversial. I'm Kojo Nnamdi.