2017 Annual Electric Reliability Investment Initiative Report

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2 BEFORE THE PUBLIC SERVICE COMMISSION OF MARYLAND IN THE MATTER OF THE APPLICATION OF ) BALTIMORE GAS AND ELECTRIC COMPANY ) CASE NO FOR ADJUSTMENTS TO ITS ELECTRIC ) AND GAS BASE RATES ) 2017 Annual Electric Reliability Investment Initiative Report Damon L. Krieger, Associate General Counsel Baltimore Gas and Electric Company 2 Center Plaza, 12 th Floor 110 West Fayette Street Baltimore, Maryland Telephone: (410) damon.krieger@bge.com Its Counsel November 1, 2017

3 Table of Contents I. INTRODUCTION... 1 II. EXECUTIVE SUMMARY OF ANNUAL ERI INITIATIVE REPORT... 4 III. REPORT OF 2014 ERI INITIATIVE WORK PLAN... 6 A. Performance Information for Projects in 2014 ERI Initiative Work Plan Expansion of the PPF Program kV Recloser Program kV Recloser Program Diverse Routing Program Selective Undergrounding Program IV. REPORT OF 2015 ERI INITIATIVE WORK PLAN A. Performance Information for Projects in 2015 ERI Initiative Work Plan Expansion of the PPF Program kV Recloser Program kV Recloser Program Diverse Routing Program Selective Undergrounding Program V. REPORT OF 2016 ERI INITIATIVE WORK PLAN A. Updated Cost Information for 2016 ERI Initiative Work Plan B. Performance Information for Projects in 2016 ERI Initiative Work Plan Expansion of the PPF Program Diverse Routing Program Selective Undergrounding Program VI. REPORT OF 2017 ERI INITIATIVE WORK PLAN A Expansion of the PPF Program Construction Status and Updated Cost Information for 2017 Expansion of the PPF Program Similar Work to the Expansion of the PPF Program Completed in B Diverse Routing Program i

4 1. Construction Status and Updated Cost Information for 2017 Diverse Routing Program Similar Work to the Diverse Routing Program that Will Be Completed in C Selective Undergrounding Program Construction Status and Updated Cost Information for 2017 Selective Undergrounding Program Similar Work to the Selective Undergrounding Program that Will Be Completed in VII. DETAILS REGARDING THE 2018 ERI INITIATIVE PROGRAMS A Expansion of the PPF Program Description of 2018 Work Plan for Expansion of the PPF Program Historic Reliability Metrics and Projected Benefits for 2018 Expansion of the PPF Program Milestones/Schedule and Preliminary Cost Estimate for 2018 Expansion of PPF Program Similar Work to the Expansion of the PPF Program that BGE Plans to Complete in B Diverse Routing Program Description of 2018 Work Plan for Diverse Routing Program Historic Reliability Metrics and Projected Benefits for 2018 Diverse Routing Program Milestones/Schedule and Cost Estimates for 2018 Diverse Routing Program Similar Work to the Diverse Routing Program that BGE Plans to Complete in C Selective Undergrounding Program Description of 2018 Work Plan for the Selective Undergrounding Program Historic Reliability Metrics and Projected Benefits for 2018 Selective Undergrounding Program ii

5 3. Milestones/Schedule and Cost Estimates for 2018 Selective Undergrounding Program Similar Work to the Selective Undergrounding Program that BGE Plans to Complete in VIII REVENUE REQUIREMENT AND RATE DETAILS IX. CONCLUSION iii

6 Appendices Appendix A Appendix B Appendix C Appendix D Appendix E Appendix F Appendix G Appendix H Appendix I Appendix J Appendix K Appendix L ERI Initiative Estimated Benefits in ACI/ACMI 2014 Work Plan Expansion of the Poorest Performing Feeder Program Performance 2014 Work Plan Expanded Recloser Deployment on 13kV Distribution Feeders Performance 2014 Expanded Recloser Deployment on 34kV Lines Performance 2015 Work Plan Expansion of the Poorest Performing Feeder Program Performance 2015 Work Plan Expanded Recloser Deployment on 13kV Distribution Feeders Performance 2015 Expanded Recloser Deployment on 34kV Lines Performance Final Cost Information for 2016 Expansion of the Poorest Performing Feeders Program 2016 Work Plan Expansion of the Poorest Performing Feeder Program Performance Reliability Metrics for Feeders Included in the 2017 Expansion of the Poorest Performing Feeders Program List of Poorest Performing 3% of Feeders Included in 2018 TRIP 2017 Causes of Interruption for Feeders Included in the 2018 TRIP Appendix M 2017 Causes of Interruption for Feeders Included in the 2018 Expansion of the Poorest Performing Feeders Program Appendix N 2018 Revenue Requirement and Volumentric Rates Calculations and Supplement iv

7 I. INTRODUCTION By Order No dated December 13, 2013, the Public Service Commission of Maryland (the Commission ) authorized Baltimore Gas and Electric Company ( BGE or the Company ) to recover through a surcharge mechanism the following five (5) electric grid resiliency and reliability improvement programs: 1. Expansion of the Poorest Performing Feeders Program (the Expansion of the PPF Program ); 2. Expanded Recloser Deployment on 13kV Distribution Feeders Program (the 13kV Recloser Program ); 3. Expanded Recloser Deployment on 34kV Lines Program (the 34kV Recloser Program ); 4. Diverse Routing of 34kV Supply Circuits Program (the Diverse Routing Program ); and 5. Selective Undergrounding Program. These programs are part of a five (5)-year short-term reliability and resiliency enhancement plan known as the Electric Reliability Investment initiative (the ERI initiative ) that BGE developed in response to the Commission s Order No in Case No (In the Matter of the Electric Service Interruptions in the State of Maryland Due to the June 29, 2012 Derecho Storm). BGE will begin the fifth year of its ERI initiative in January As part of its conditional approval of the ERI initiative, the Commission ordered BGE to file an annual report by November 1 st of each year of the five (5)-year plan. This Annual Electric Reliability Investment Initiative Report (the Annual Report ) is intended to comply with such a requirement, and it includes the following information for the 2014, 2015, 2016, 1

8 2017, and 2018 work plans for the ERI initiative: ERI Initiative Work Plan Actual feeder reliability metrics for the feeders included in the 2014 Expansion of the PPF Program; and Performance information available for the other projects completed as part of the 2014 ERI initiative work plan ERI Initiative Work Plan Actual feeder reliability metrics for the feeders included in the 2015 Expansion of the PPF Program; and Performance information available for the other projects completed as part of the 2015 ERI initiative work plan ERI Initiative Work Plan Updated actual expenditures as of September 30, 2017 for each project included in the 2016 ERI initiative work plan; 2 Actual feeder reliability metrics for the feeders included in the 2016 Expansion of the PPF Program; Performance information available for the other projects completed as part of the 2016 ERI initiative work plan; and The reconciliation of projected costs and recoveries that includes a true-up calculation of over- and under-recoveries. 1 In Order No , the Commission directed BGE to report on any operations and maintenance ( O&M ) savings from ERI initiative projects and report such savings as part of its annual compliance filings. See Order No at p Similar to the Company s prior statements on the matter, BGE anticipates that any savings related to the implementation of the ERI initiative are likely to be in the form of opportunity savings, rather than savings that directly result in lower costs. This is because the implementation of the ERI initiative programs will primarily free up Company resources to address other reliability issues on the system, rather than allow for less resources to be needed in general to work on the system. In addition, with respect to ERI initiative programs such as the 13kV Recloser Program and the 34kV Recloser Program, the installation of reclosers reduces the number of customer interruptions, but they do not reduce the number of events that still must be remediated. As of this Annual Report, BGE has not identified any O&M savings other than opportunity savings stemming from the 2014, 2015, 2016 and 2017 work plans for the ERI initiative. In the event that any O&M savings other than opportunity savings are realized as a result of the 2014, 2015, 2016 and 2017 work plans for the ERI initiative in the future, BGE will report those savings as part of subsequent annual ERI initiative compliance filings. 2 A multi-year diverse routing project was included in the 2016 ERI initiative work plan Queen Anne & Mitchellville which was completed about the time of the filing of this Annual Report. As part of the 2018 Annual Electric Reliability Investment Initiative Report, BGE will provide final cost information for the 2016 ERI initiative work plan. 2

9 2017 ERI Initiative Work Plan The status of each project and the respective milestones completed; Actual money spent as of September 30, 2017 on each project as it relates to the milestone; Actual feeder reliability metrics for the feeders included in the 2017 Expansion of the PPF Program; Information on similar work completed by BGE in 2017 outside of the ERI initiative; and The reconciliation of projected costs and recoveries that includes a true-up calculation of over- and under-recoveries ERI Initiative Work Plan A detailed description of the work to be performed including location; Performance objective(s) for each project in terms of avoided customer interruptions ( ACI ) and avoided customer minutes of interruption ( ACMI ); Major milestones, at minimum annual, and associated estimated costs for each milestone; Estimated total costs for each project; and Data on expenditures planned for the upcoming year outside of the ERI initiative for similar work to that which will be done and paid for through the ERI initiative surcharge recovery mechanism. Pursuant to the Letter Order issued by the Commission on December 17, 2014, and consistent with relevant comments filed by Commission Staff, BGE has also included in this Annual Report an update of Appendix A of Maillog No , which reflects the estimated benefits in ACI and ACMI of both past work completed and work to be completed in See Appendix A. Finally, BGE has included with this Annual Report a proposed rate for the ERI initiative surcharge for 2018, including bill impacts. 3

10 II. EXECUTIVE SUMMARY OF ANNUAL ERI INITIATIVE REPORT January 1, 2018 will mark the beginning of the fifth year of BGE s five (5)-year ERI initiative. While the success of the ERI initiative cannot be fully measured and appreciated until it has been completed, BGE s customers are already experiencing increased electric reliability as a result of the work completed by BGE in the first four (4) years of the initiative. Available reliability performance information for the projects completed under the 2014, 2015, and 2016 ERI initiative work plans is positive. In addition, BGE is on track to complete all of the work in the 2016 ERI initiative work plan for a projected final cost of $12,310,000, 3 which remains in line with the updated cost estimate that BGE presented to the Commission in December 2016 of $11,845, BGE is on track to complete its 2017 work plan for the ERI initiative by the end of the calendar year. The following Table 1 includes updated cost estimates for the 2017 ERI initiative work plan: Table 1: Updated Cost Estimates for 2017 ERI Initiative Work Plan 2017 ERI Initiative Programs Previously Reported Cost Estimates 5 Updated Cost Estimates 2017 Capital 2017 O&M 2017 Capital 2017 O&M Expansion of the PPF Program 6 $1,200,000 $1,070,000 $1,220,000 $1,070,000 Diverse Routing Program $6,650,000 $0 $5,630,000 $0 Selective Undergrounding Program $1,130,000 $0 $1,080,000 $0 3 Throughout this Annual Report, BGE has rounded cost data up to the nearest one thousand or ten thousand; provided, however, this does not apply to the calculation of the 2018 revenue requirement. 4 The original cost estimate presented to the Commission for the 2016 ERI initiative work plan as part of BGE s 2015 Annual Electric Reliability Investment Initiative Report was $13,190, The source of the Previously Reported Preliminary Cost Estimates for the Expansion of the PPF Program is BGE s April 3, 2017 compliance filing. See Maillog No The source of the Previously Reported Preliminary Cost Estimates for all other 2016 ERI initiative programs is BGE s November 1, 2016 ERI initiative annual report. See Maillog No In its 2016 ERI initiative annual report, BGE estimated capital costs of $1,325,000 and operations and maintenance costs of $915,000. BGE revised these estimated costs in its April 3, 2017 supplemental filing regarding the 2017 Expansion of the Poorest Performing Feeder Program. 4

11 2017 ERI Initiative Programs Previously Reported Cost Estimates 5 Updated Cost Estimates 2017 Capital 2017 O&M 2017 Capital 2017 O&M Capital and O&M Totals $8,980,000 $1,070,000 $7,930,000 $1,070,000 Totals $10,050,000 $9,000,000 As shown above in Table 1, the updated cost estimate for the 2017 work plan is lower than the original cost estimate that the Commission considered in its approval of the 2017 ERI initiative work plan in December 2016 and as updated for the Expansion of the PPF Program in BGE s April 3, 2017 compliance filing. 7 This is largely due to lower than anticipated costs for the 2017 projects included in the Diverse Routing Program. 8 In compliance with the Commission s directives, BGE has included in this Annual Report detailed information on the specific projects that BGE proposes to execute in 2018 under the ERI initiative and obtain contemporaneous cost recovery through the ERI initiative surcharge. As requested by the Commission, BGE has also included in this Annual Report information regarding similar work to the three (3) ERI initiative programs that BGE plans to complete in 2018 outside of the ERI initiative and associated surcharge. The following Table 2 includes refined cost estimates for the 2018 ERI initiative work plan: 9 7 BGE presented to the Commission a cost estimate of $11,635,000 for the 2017 ERI initiative work plan in its November 1, 2016 ERI initiative annual report. See Maillog No As discussed throughout this Annual Report, the updated cost estimates for the 2017 work plan are based upon actual financial information available in BGE s accounting systems as of September 30, 2017 and projected expenditures remaining for the 2017 ERI initiative. In connection with the 2018 ERI initiative annual report and calculation of a 2019 revenue requirement, BGE will true-up the updated cost estimates and actual expenditures for the 2016, 2017, and 2018 work plans, with the difference between actual costs and forecasted expenditures accruing interest at BGE s electric authorized rate of return. 8 The actual cost of a reliability improvement project such as those included in the ERI initiative is ultimately dependent upon a number of factors, including final design and engineering, permitting requirements, actual field conditions, and actual labor and material costs. 9 The cost estimates are refined from the cost estimates for the 2018 work plan for the ERI initiative that BGE originally presented in the underlying base rate case filings. 5

12 Table 2: Refined Cost Estimates for 2018 ERI Initiative Work Plan 2018 ERI Initiative Programs Refined Cost Estimates 2018 Capital 2018 O&M Expansion of the PPF Program $1,625,000 $645,000 Diverse Routing Program $4,750,000 $0 Selective Undergrounding Program $1,780,000 $0 Capital and O&M Totals $8,155,000 $645,000 Total $8,800,000 Finally, BGE has calculated a 2018 revenue requirement and volumetric rates for each customer class subject to the ERI initiative surcharge mechanism based upon the updated cost information included in this Annual Report for the 2016, 2017, and 2018 work plans and reflecting the rate of return approved by the Commission in Case No. 9406, BGE s last base rate case proceeding. As part of the revenue requirement calculation, BGE has trued-up all estimated and actual expenditures, with the difference between actual costs and forecasted expenditures accruing interest at BGE s electric authorized rate of return. 10 The 2018 ERI initiative revenue requirement is $8.1 million. 11 Based upon this revenue requirement, the 2018 residential ERI initiative surcharge will equate to a monthly charge of $0.32 for the average residential customer using 925 kwh per month. III. REPORT OF 2014 ERI INITIATIVE WORK PLAN A. Performance Information for Projects in 2014 ERI Initiative Work Plan Almost three years have elapsed since BGE completed its 2014 ERI initiative work plan. The performance data available for this body of work is positive and consistent with the overarching goal of the ERI initiative to further improve electric reliability for customers in the 10 As noted above, actual expenditures reflect financial information available in BGE s accounting systems as of September 30, This revenue requirement is less than the estimated revenue requirement for 2018 of $9.5 million that the Commission considered in the underlying base rate case proceeding. See Case No. 9326, Order No at p

13 short-term. As part of this Annual Report, BGE has compiled performance information for each of the projects completed under the 2014 ERI initiative work plan. In order to properly assess the effectiveness of a project, BGE has excluded the performance information for the year in which the project was completed in this case 2014 and provided a before and after performance comparison Expansion of the PPF Program The following Table 3 includes aggregate performance information for the 2014 Expansion of the PPF Program: Table 3: 2014 Expansion of the PPF Program Performance Aggregate Performance of All 40 Feeders Average Average 12 All Inclusive Excluding MOE All Inclusive Excluding MOE SAIFI SAIDI SAIFI SAIDI SAIFI SAIDI SAIFI SAIDI As shown above, the aggregate performance of the forty (40) feeders improved during the three (3)-year period of October 1, 2014 to September 30, 2017, as compared to the average performance of these feeders during the three (3)-year period preceding performance of the work of October 1, 2010 to September 30, For additional reference, BGE has also included as Appendix B performance information for each of the individual forty (40) feeders remediated as part of the 2014 Expansion of the PPF Program kV Recloser Program In order to evaluate the performance of the kV Recloser Program, BGE reviewed outage data for the 13kV distribution automation reclosers ( DA Reclosers ) installed in 2014 under this Program. The outage data allowed BGE to determine the number of recloser 12 Consistent with the time period used to select feeders for inclusion in the Expansion of the PPF Program, BGE performed this analysis using data from October 1 to September 30 of each calendar year. 7

14 operations and calculate the avoided customer interruptions that resulted from the installation of the reclosers. BGE then applied its system-wide feeder mains customer average interruption duration index ( CAIDI ) to approximate the avoided customer minutes of interruption. The following Table 4 includes aggregate performance information for the kV Recloser Program: Table 4: kV Recloser Program Performance Aggregate Performance of All Feeders Average Excluding MOE SAIFI SAIDI SAIFI SAIDI Average Excluding MOE Partial Year Recloser Benefits 14 Total Recloser Operations Total ACI Total ACMI ,843 12,547,622 As shown above, the 13kV DA Reclosers that BGE installed as part of the kV Recloser Program had one hundred forty-three (143) operations in 2015, 2016, and the first nine (9) months of 2017, which prevented one hundred seventy-seven thousand eight hundred forty-three (177,843) customer interruptions. For additional reference, BGE has also included as Appendix C performance information for each of the individual feeders that had one or more 13kV DA Reclosers installed as part of the kV Recloser Program. This group of one hundred fifty (150) installed 13kV DA Reclosers will continue to provide customer benefits on a recurring basis year-after-year and at an even higher level during periods of increased storm activity Analysis performed on data from January 1, 2015 to September 30, Analysis performed on data from January 1, 2015 to September 30, It is important to note that the total reported benefits for the 13kV DA Reclosers installed under the ERI initiative are conservative because it does not capture any indirect operational benefits. For example, the 13kV DA Reclosers installed under the ERI initiative will also help to prevent additional customer interruptions and reduce customer minutes of interruption by allowing other non-eri initiative DA Recloser devices on the BGE system to operate. This type of scenario most commonly occurs during Auto Restoration Schemes ( ARS ) and manual switching operations where certain customers are transferred to another feeder. Having the 13kV DA Reclosers installed facilitates the customer transfer. BGE, however, does not have the ability to track these sorts of indirect benefits. 8

15 kV Recloser Program Similar to the kV Recloser Program, BGE evaluated the performance of the kV Recloser Program by reviewing outage data for the 34kV DA Reclosers installed in 2014 under this Program and tracking the number of recloser operations. The following Table 5 includes aggregate performance information for the kV Recloser Program: Table 5: kV Recloser Program Performance Partial Year (All Inclusive) 16 Avoided Momentary Avoided Sustained Recloser Operations Interruptions Interruptions Total 10 20,152 0 As shown above, the fifteen (15) 34kV DA Reclosers that BGE installed as part of the kV Recloser Program operated a total of ten (10) times in 2015, 2016, and the first nine (9) months of 2017, assisting with avoiding twenty thousand one hundred fifty-two (20,152) customer momentary interruptions by providing additional sectionalization. This sectionalizing is critical to the overall reliability of the 34kV system because while the likelihood of an outage event is lower relative to the 13kV system, the events will generally be much more impactful. For additional reference, BGE has also included as Appendix D additional operational data for the 34kV DA Reclosers installed as part of the kV Recloser Program Diverse Routing Program In order to evaluate the performance of the 2014 Diverse Routing Program, BGE compared the loss of supply events before and after the year in which the projects were completed. The following Table 6 includes such performance information for each of the projects that BGE completed under the 2014 Diverse Routing Program: 16 Analysis performed on data from January 1, 2015 to September 30,

16 Table 6: 2014 Diverse Routing Program Performance Distribution Substation 34kV Supply Lines Loss of Supply Events (All Inclusive) Partial Year Loss of Supply Events (All Inclusive) 17 Caldwell 33624, Defense Highway 33780, Wall Cove 33710, As shown above, the three (3) substations for which BGE diversely routed the supply lines experienced zero (0) loss of supply events in 2015, 2016, and the first nine (9) months of Selective Undergrounding Program In order to evaluate the performance of the 2014 Selective Undergrounding Program, BGE compared the number of customer interruptions before and after the year in which the projects were completed. Notably, so as to provide the most direct insight into the effectiveness of each selective undergrounding project, BGE limited its data to the location where the feeder transitions from overhead to underground and every portion of the feeder downstream from that transition location. The following Table 7 includes such performance information for each of the projects that BGE completed under the 2014 Selective Undergrounding Program: Table 7: 2014 Selective Undergrounding Program Performance Feeder Neighborhood Customers Served Customers Benefited Total # Events (All Inclusive) Total Customer Interruptions Partial Year (All Inclusive) 18 Total # Events Total Customer Interruptions 7191 Millbrook 1, , Wakefield / Leakin Park 2, , As shown above, Feeder Nos and 7706 experienced reduced customer interruptions in 2015, 2016, and the first nine (9) months of 2017 as compared to the four (4)-year period preceding performance of the selective undergrounding work. 17 Analysis performed on data from January 1, 2015 to September 30, Analysis performed on data from January 1, 2015 to September 30,

17 IV. REPORT OF 2015 ERI INITIATIVE WORK PLAN A. Performance Information for Projects in 2015 ERI Initiative Work Plan Less than two years have elapsed since BGE completed its 2015 ERI initiative work plan, and as such, only a limited amount of data is available to evaluate the effectiveness of the work. Nonetheless, the performance data available for this body of work thus far is positive and consistent with the overarching goal of the ERI initiative to further improve electric reliability for customers in the short-term. As part of this Annual Report, BGE has compiled performance information for each of the projects completed under the 2015 ERI initiative work plan. In order to properly assess the effectiveness of a project, BGE has excluded the performance information for the year in which the project was completed in this case 2015 and provided a before and after performance comparison Expansion of the PPF Program The following Table 8 includes aggregate performance information for the 2015 Expansion of the PPF Program: Table 8: 2015 Expansion of the PPF Program Performance Aggregate Performance of All 40 Feeders Average Average 19 All Inclusive Excluding MOE All Inclusive Excluding MOE SAIFI SAIDI SAIFI SAIDI SAIFI SAIDI SAIFI SAIDI As shown above, the aggregate performance of the forty (40) feeders improved during the two (2)-year period of October 1, 2015 to September 30, 2017 as compared to the average performance of these feeders during the three (3)-year period preceding performance of the work of October 1, 2011 to September 30, For additional reference, BGE has also included as 19 Consistent with the time period used to select feeders for inclusion in the Expansion of the PPF Program, BGE performed this analysis using data from October 1, 2015 to September 30,

18 Appendix E performance information for each of the individual forty (40) feeders remediated as part of the 2015 Expansion of the PPF Program kV Recloser Program In order to evaluate the performance of the kV Recloser Program, BGE reviewed outage data for the 13kV DA Reclosers installed in 2015 under this Program. The outage data allowed BGE to determine the number of recloser operations and calculate the avoided customer interruptions that resulted from the installation of the reclosers. BGE then applied its systemwide feeder mains CAIDI to approximate the avoided customer minutes of interruption. The following Table 9 includes aggregate performance information for the kV Recloser Program: Table 9: kV Recloser Program Performance Aggregate Performance of All Feeders Excluding MOE Excluding MOE 20 SAIFI SAIDI SAIFI SAIDI Partial Year Recloser Benefits 21 Total Recloser Total Total Operations ACI ACMI ,018 12,647,091 As shown above, the 13kV DA Reclosers that BGE installed as part of the kV Recloser Program had one hundred fifty-five (155) operations in 2016 and the first nine (9) months of 2017, which prevented one hundred eighty thousand eighteen (180,018) customer interruptions. For additional reference, BGE has also included as Appendix F performance information for each of the individual feeders that had one or more 13kV DA Reclosers installed as part of the kV Recloser Program. This group of one hundred fifty (150) installed 13kV DA 20 Analysis performed on data from January 1, 2016 to September 30, Analysis performed on data from January 1, 2016 to September 30,

19 Reclosers will continue to provide customer benefits on a recurring basis year-after-year and at an even higher level during periods of increased storm activity kV Recloser Program Similar to the kV Recloser Program, BGE evaluated the performance of the kV Recloser Program by reviewing outage data for the 34kV DA Reclosers installed in 2015 under this Program and tracking the number of recloser operations. The following Table 10 includes aggregate performance information for the kV Recloser Program: Table 10: kV Recloser Program Performance Partial Year (All Inclusive) 23 Avoided Momentary Avoided Sustained Recloser Operations Interruptions Interruptions Total As shown above, the fifteen (15) 34kV DA Reclosers that BGE installed as part of the kV Recloser Program had zero (0) operations in 2016 and the first nine (9) months of While the fifteen (15) DA Reclosers have yet to operate, they are designed to mitigate the number of customer interruptions after an interrupting event on the 34kV system by providing additional sectionalization. 24 This sectionalizing is critical to the overall reliability of the 34kV system because while the likelihood of an outage event is lower relative to the 13kV system, the events will generally be much more impactful. For additional reference, BGE has also included as Appendix G additional operational data for the 34kV DA Reclosers installed as part of the kV Recloser Program. 22 See supra at n Analysis performed on data from January 1, 2016 to September 30, There are several factors that impact the number of recloser operations and the projected benefits of the devices. Some reclosers are installed on 34kV feeders after the distribution substation and only protect against faults that occur between the recloser and downstream commercial and industrial customers. In addition, for recloser installations between master and distribution substations, the recloser could be on an alternate feed and does not need to operate if there is a loss of supply event on the primary feed. 13

20 Diverse Routing Program In order to evaluate the performance of the 2015 Diverse Routing Program, BGE compared the loss of supply events before and after the year in which the projects were completed. The following Table 11 includes such performance information for each of the projects that BGE completed under the 2015 Diverse Routing Program: Table 11: 2015 Diverse Routing Program Performance Distribution Substation 34kV Supply Lines Loss of Supply Events (All Inclusive) Partial Year Loss of Supply Events (All Inclusive) 25 Hampstead 33921, Middleborough 33880, Baynesville 33774, Carney 33612, As shown above, the four (4) substations for which BGE diversely routed the supply lines experienced zero (0) loss of supply events in 2016 and the first nine (9) months of Selective Undergrounding Program In order to evaluate the performance of the 2015 Selective Undergrounding Program, BGE compared the number of customer interruptions before and after the year in which the projects were completed. Notably, so as to provide the most direct insight into the effectiveness of each selective undergrounding project, BGE limited its data to the location where the feeder transitions from overhead to underground and every portion of the feeder downstream from that transition location. The following Table 12 includes such performance information for each of the projects that BGE completed under the 2015 Selective Undergrounding Program: 25 Analysis performed on data from January 1, 2016 to September 30,

21 Table 12: 2015 Selective Undergrounding Program Performance Feeder Neighborhood Customers Served Customers Benefited Total # Events (All Inclusive) Total Customer Interruptions Partial Year (All Inclusive) 26 Total # Events Total Customer Interruptions 7291 Lochearn 2, , Hazelwood 2, , Satyr Woods 1, , Allyson Gardens / Worthington Place South 2,420 1, , As shown above, Feeder No experienced reduced customer interruptions in 2016 and the first nine (9) months of None of the other three feeders experienced any events or customer interruptions in 2016 and the first nine (9) months of This compares very favorably to the four (4)-year period preceding performance of the selective undergrounding work. V. REPORT OF 2016 ERI INITIATIVE WORK PLAN A. Updated Cost Information for 2016 ERI Initiative Work Plan BGE has completed all of the work for the 2016 ERI initiative work plan. The following Table 13 includes updated cost information for the 2016 ERI initiative work plan based upon actual financial information available in BGE s accounting system: 26 Analysis performed on data from January 1, 2016 to September 30, Feeder No experienced three (3) events during 2016 and the first nine (9) months of 2017 that could not have been avoided as a result of the selective undergrounding project. All events took place on the overhead section of the line, and were caused by wildlife, corrosion, and vegetation. The decreased number of customer interruptions per event is a positive indicator. 15

22 Table 13: Updated Cost Information for 2016 ERI Initiative Work Plan 2016 ERI Initiative Programs and Projects Updated 28 Program and Project Costs Expansion of the PPF Program 29 $3,470,000 Diverse Routing Program Van Bibber $1,500,000 Emmorton $320,000 Timonium $240,000 Wakefield $1,090,000 Queen Anne & Mitchellville 30 $2,990,000 Selective Undergrounding Program Feeder No $630,000 Feeder No $430,000 Feeder No $570,000 Feeder No $350,000 Feeder No $720,000 Total $12,310,000 The updated cost of the 2016 ERI initiative work plan reasonably approximates the original estimates that BGE provided to the Commission. In the compliance filing that BGE filed in November 2015 that the Commission used as a basis to approve the 2016 ERI initiative work plan, BGE estimated that the cost to complete the work would be $13,190,000. At the hearing on BGE s 2016 ERI annual report that took place on December 21, 2016, and based on actual financial information available through November 2016, BGE updated its cost estimate to $11,845,000. The updated cost estimate for the 2016 ERI initiative work plan of $12,310,000 remains in line with both prior cost estimates. 28 All costs in this table are final with the exception of the multi-year Queen Anne & Mitchellville Diverse Routing project. 29 Final cost information for each of the feeders included in the 2016 Expansion of the Poorest Performing Feeders Program is set forth in Appendix H. 30 The Queen Anne & Mitchellville Diverse Routing Project was completed in 2017 as originally scheduled. The project cost of $2,990,000 is a projected final cost made up of $2,850,000 in Actual Expenditures as of September 30, 2017, and $140,000 in Projected Expenditures. 16

23 B. Performance Information for Projects in 2016 ERI Initiative Work Plan Expansion of the PPF Program The following Table 14 includes aggregate performance information for the 2016 Expansion of the PPF Program: Table 14: 2016 Expansion of the PPF Program Performance Aggregate Performance of All 40 Feeders Average All Inclusive Excluding MOE All Inclusive Excluding MOE SAIFI SAIDI SAIFI SAIDI SAIFI SAIDI SAIFI SAIDI As shown above, the aggregate performance of the forty (40) feeders improved during the one (1)-year period of October 1, 2016 to September 30, 2017 as compared to the average performance of these feeders during the three (3)-year period preceding performance of the work of October 1, 2012 to September 30, For additional reference, BGE has also included as Appendix I performance information for each of the individual forty (40) feeders remediated as part of the 2016 Expansion of the PPF Program Diverse Routing Program In order to evaluate the performance of the 2016 Diverse Routing Program, BGE compared the loss of supply events before and after the year in which the projects were completed. The following Table 15 includes such performance information for each of the projects that BGE completed under the 2016 Diverse Routing Program, with the exception of the Queen Anne & Mitchellville Diverse Routing Project: Consistent with the time period used to select feeders for inclusion in the Expansion of the PPF Program, BGE performed this analysis using data from October 1, 2016 to September 30, The Queen Anne & Mitchellville Diverse Routing Project was completed in 2017, as originally scheduled. As stated previously, in order to properly assess the effectiveness of a project, BGE has excluded performance information for the year in which the project was completed in the case of Queen Anne and Mitchellville, Performance information for Queen Anne & Mitchellville will be provided in the 2018 annual ERI initiative report. 17

24 Table 15: 2016 Diverse Routing Program Performance Distribution Substation 34kV Supply Lines Loss of Supply Events (All Inclusive) 2017 Partial Year Loss of Supply Events (All Inclusive) 33 Van Bibber 33844, Emmorton 33840, Timonium 33601, Wakefield 33990, As shown above, the four (4) substations for which BGE diversely routed the supply lines experienced zero (0) loss of supply events in the first nine (9) months of Selective Undergrounding Program In order to evaluate the performance of the 2016 Selective Undergrounding Program, BGE compared the number of customer interruptions before and after the year in which the projects were completed. Notably, so as to provide the most direct insight into the effectiveness of each selective undergrounding project, BGE limited its data to the location where the feeder transitions from overhead to underground and every portion of the feeder downstream from that transition location. The following Table 16 includes such performance information for each of the projects that BGE completed under the 2016 Selective Undergrounding Program: 33 Analysis performed on data from January 1, 2017 to September 30,

25 Table 16: 2016 Selective Undergrounding Program Performance Feeder Neighborhood Customers Served Customers Benefited Total # Events (All Inclusive) Total Customer Interruptions 2017 Partial Year (All Inclusive) 34 Total # Events Total Customer Interruptions 7119 Donneybrook / Wiltondale 2,662 1, , Spencerville 1, , Lochearn / Haywood Htgs 2, , Cedar Beach / Breezy Point Beach 2, , Manhattan Beach / Manor / Oak Grove / Windrush Farm 1, , As shown above, Feeder Nos. 7119, 7285, and experienced fewer events and/or reduced customer interruptions in the first nine (9) months of 2017 as compared to the four (4)-year period preceding performance of the selective undergrounding work. Neither of the remaining two (2) feeders Feeder Nos and 8301 experienced any events or customer interruptions in the first nine (9) months of VI. REPORT OF 2017 ERI INITIATIVE WORK PLAN A Expansion of the PPF Program 1. Construction Status and Updated Cost Information for 2017 Expansion of the PPF Program Under the 2017 Expansion of the PPF Program, BGE targeted a total of forty (40) electric distribution feeders for reasonable remediation measures to improve the feeder performance level. BGE has completed its remediation work on thirty-six (36) feeders and will complete the remaining work on the last four feeders, Feeder Nos. 7132, 8074, 8152, and 8435, in November 34 Analysis performed on data from January 1, 2017 to September 30, Feeder No experienced two (2) events during the first nine (9) months of 2017 that could not have been avoided as a result of the selective undergrounding project. Both events took place on the overhead section of the line one event involved a vehicular pole strike, and the second event involved a vine contact with an overhead line that resulted in downstream customer interruptions. 19

26 2017. Additionally, as of the date of this filing, the actual work completed on the selected feeders matches the feeder-specific work plan that BGE filed with the Commission on April 1, 2017 under Maillog No Based upon actual financial information available in BGE s accounting systems as of September 30, 2017 and projected expenditures remaining for the 2017 Expansion of the PPF Program, BGE has updated the cost estimates previously provided to the Commission for each of the forty (40) feeders. Such updated information is set forth in the following Table 17: Table 17: 2016 Expansion of the PPF Program Updated Feeder-Specific Cost Estimates Feeders Inspection Costs (O&M) Actual Expenditures Enhanced VM Costs (O&M) Construction Costs (Capital) Corrective Maintenance Costs 20 Projected Expenditures Enhanced VM Costs (O&M) Construction Costs (Capital) Actual + Projected Expenditures 7791 $6,000 $17,000 $0 $45,000 $0 $0 $68, $5,000 $11,000 $0 $41,000 $0 $0 $57, $0 $23,000 $0 $0 $0 $0 $23, $0 $13,000 $0 $0 $0 $0 $13, $0 $33,000 $24,000 $0 $0 $0 $57, $0 $29,000 $0 $0 $0 $0 $29, $0 $7,000 $0 $0 $0 $0 $7, $21,000 $0 $0 $53,000 $32,000 $0 $106, $19,000 $0 $0 $51,000 $0 $0 $70, $0 $6,000 $0 $0 $0 $0 $6, $12,000 $0 $38,000 $32,000 $42,000 $0 $124, $18,000 $10,000 $0 $83,000 $0 $0 $111, $7,000 $7,000 $0 $23,000 $0 $0 $37, $0 $0 $73,000 $0 $0 $0 $73, $9,000 $19,000 $83,000 $37,000 $0 $0 $148, $8,000 $19,000 $0 $0 $0 $0 $27, $5,000 $30,000 $113,000 $26,000 $0 $67,000 $241, $1,000 $8,000 $0 $12,000 $0 $0 $21, $5,000 $8,000 $0 $26,000 $0 $0 $39, $0 $0 $0 $0 $0 $0 $ $0 $23,000 $75,000 $0 $0 $0 $98, $0 $30,000 $142,000 $0 $0 $0 $172,000

27 Feeders Inspection Costs (O&M) Actual Expenditures Enhanced VM Costs (O&M) Construction Costs (Capital) Corrective Maintenance Costs Projected Expenditures Enhanced VM Costs (O&M) Construction Costs (Capital) Actual + Projected Expenditures 8007 $2,000 $14,000 $0 $4,000 $0 $0 $20, $0 $0 $0 $0 $0 $0 $ $0 $27,000 $0 $0 $0 $0 $27, $2,000 $0 $0 $15,000 $0 $0 $17, $0 $17,000 $0 $0 $0 $0 $17, $21,000 $3,000 $0 $57,000 $0 $0 $81, $0 $35,000 $37,000 $0 $0 $0 $72, $2,000 $0 $0 $16,000 $0 $0 $18, $0 $0 $0 $0 $0 $0 $ $0 $0 $0 $0 $0 $0 $ $9,000 $1,000 $0 $49,000 $0 $0 $59, $1,000 $0 $0 $9,000 $0 $0 $10, $0 $29,000 $93,000 $0 $0 $87,000 $209, $0 $13,000 $0 $0 $0 $0 $13, $0 $0 $0 $0 $0 $0 $ $9,000 $12,000 $73,000 $31,000 $0 $0 $125, $0 $53,000 $0 $0 $0 $0 $53, $7,000 $14,000 $0 $14,000 $0 $0 $35,000 Totals: $169,000 $511,000 $751,000 $624,000 $74,000 $154,000 $2,283,000 BGE targeted a total of one thousand six hundred twenty seven (1,627) miles in the 2017 Expansion of the PPF Program. The updated cost estimate of performing inspection and reasonable remediation measures on a per mile basis for the 2017 Expansion of the PPF Program is approximately $1,403 per mile. As a final matter, it is premature to make any conclusions regarding the effectiveness of the reasonable remediation measures completed on the feeders included in the 2017 Expansion of the PPF Program. In Order No , however, the Commission directed BGE to file in its annual ERI initiative report actual feeder metrics for the feeders included in the Expansion of 21

28 the PPF Program. 36 As such, BGE has included in Appendix J the 2017 reliability metrics for the feeders included in the 2017 Expansion of the PPF Program Similar Work to the Expansion of the PPF Program Completed in 2017 The Expansion of the PPF Program is largely modeled after BGE s Targeted Reliability Improvement Program ( TRIP ), which is the annual program that BGE established to comply with the requirements of Code of Maryland Regulation ( COMAR ) As part of TRIP, each year BGE identifies a list of its three percent (3%) poorest performing electric distribution feeders and targets such feeders for reasonable remediation measures to improve the feeder performance level. In connection with the 2017 TRIP, BGE has completed reasonable remediation measures on a total of thirty-nine (39) electric distribution feeders. The total cost estimate of the 2017 TRIP based upon actual financial information available in BGE s accounting systems as of September 30, 2017 and projected expenditures remaining for the 2017 TRIP is $2,600,000. BGE targeted a total of one thousand one hundred seven (1,107) miles in the 2017 TRIP. The estimated cost of performing inspection and reasonable remediation measures on a per mile basis for the 2017 TRIP is approximately $2,030 per mile. B Diverse Routing Program 1. Construction Status and Updated Cost Information for 2017 Diverse Routing Program Under the 2017 work plan for the Diverse Routing Program, BGE will diversely route the supply circuits for four (4) electric distribution substations: Cooksville; Chesapeake Beach; 36 See Order No at p Consistent with the time period used to select the feeders for inclusion in the Expansion of the PPF Program, the 2017 reliability metrics cover the twelve (12)-month period of October 1, 2016 to September 30,

29 South River; and Stepney. These four (4) substations have a higher risk of experiencing outages due to the configuration of their supply circuits. As part of the Diverse Routing Program, BGE will route the supply circuits for the selected distribution substations on separate routes or through selective undergrounding of certain segments of the supply circuits, thus creating dual supply paths to the substation. BGE has completed the diverse routing work at Chesapeake Beach, South River, and Stepney, and it is on schedule to complete the Cooksville diverse routing project in December In its 2016 ERI initiative annual report, BGE described the scope of work for these diverse routing projects based upon the design and engineering work that had been completed as of the filing. The actual scopes of work completed and to be completed on these projects are consistent with the original scopes of work that BGE presented to the Commission in the 2016 ERI initiative annual report. Based upon actual financial information available in BGE s accounting systems as of September 30, 2017 and projected expenditures remaining for the 2017 Diverse Routing Program, BGE has updated the cost estimate previously provided to the Commission in BGE s 2016 ERI initiative annual report. Such updated information is set forth in the following Table 18: Table 18: 2017 Diverse Routing Program Updated Cost Estimate Diverse Routing Project Actual Expenditures Projected Expenditures Actual + Projected Expenditures Cooksville $900,000 $640,000 $1,540,000 Chesapeake Beach $1,210,000 $0 $1,210,000 South River $1,330,000 $0 $1,330,000 Stepney $1,450,000 $100,000 $1,550,000 Total $5,710,000 23

30 As explained in BGE s prior filings related to the ERI initiative, the actual cost of a diverse routing project can vary considerably dependent upon final design and engineering, contractor bids, and actual field conditions. Due to cost efficiencies achieved during the bidding process, BGE is now able to project significant savings for the 2017 Diverse Routing Program, as compared to the original cost estimate of $6,650, Similar Work to the Diverse Routing Program that Will Be Completed in 2017 Consistent with the information that BGE reported to the Commission in its 2016 ERI initiative annual report, BGE did not initiate any new diverse routing projects in 2017 outside of the ERI initiative. C Selective Undergrounding Program 1. Construction Status and Updated Cost Information for 2017 Selective Undergrounding Program Under the 2017 work plan for the Selective Undergrounding Program, BGE will selectively underground portions of two (2) existing overhead electric distribution feeders: Feeder Nos (Colonial Acres / Brook Hill Manor) and 7461 (Cape Saint John). Selective undergrounding of overhead distribution lines improves the reliability and resiliency of the distribution system by eliminating the number of sustained customer interruptions caused by outage events typically affecting the overhead system, such as tree contact, vehicle pole hits, and wildlife. BGE has completed the selective undergrounding work on Feeder No. 8054, and it is on schedule to complete the selective undergrounding work on Feeder No In its 2016 ERI initiative annual report, BGE described the scope of work for these selective undergrounding projects based upon the design and engineering work that had been completed as of the filing. The actual scopes of work completed and to be completed on these projects are consistent with 24

31 the original scopes of work that BGE presented to the Commission in the 2016 ERI initiative annual report. Based upon actual financial information available in BGE s accounting systems as of September 30, 2017 and projected expenditures remaining for the 2017 Selective Undergrounding Program, BGE has updated the cost estimate previously provided to the Commission in BGE s 2016 ERI initiative annual report. Such updated information is set forth in the following Table 19: Table 19: 2017 Selective Undergrounding Updated Cost Estimate Selective Undergrounding Project Actual Expenditures Projected Expenditures Actual + Projected Expenditures 8054 Colonial Acres / Brook Hill Manor $400,000 $0 $400, Cape Saint John $640,000 $40,000 $680,000 Total $1,040,000 $40,000 $1,080,000 As explained in BGE s prior filings related to the ERI initiative, the actual cost of a selective undergrounding project can vary considerably dependent upon final design and engineering and actual field conditions. While the overall updated cost estimate for the 2017 Selective Undergrounding Program is in line with the cost estimate of $1,130,000 presented in the 2016 ERI initiative annual report, the individual projects varied a bit up and down from the 2016 cost estimates. 2. Similar Work to the Selective Undergrounding Program that Will Be Completed in 2017 In 2017 outside of the Selective Undergrounding Program and associated ERI initiative surcharge, BGE will selectively underground approximately nineteen (19) miles of overhead electric distribution lines. The total cost estimate to complete this non-eri initiative 2017 work is $11,420,000. This cost information is based upon actual financial information available in 25

32 BGE s accounting systems as of September 30, 2017 and projected remaining expenditures for the selective undergrounding work. VII. DETAILS REGARDING THE 2018 ERI INITIATIVE PROGRAMS A Expansion of the PPF Program In compliance with COMAR , BGE files an annual report with the Commission that includes a list of three percent (3%) of the electric distribution feeders on BGE s system that it has identified as having the poorest feeder reliability. As further required by COMAR, BGE targets the feeders on this list for reasonable remediation measures to improve the feeder performance level. BGE s Expansion of the PPF Program doubles the number of feeders identified by BGE as part of the COMAR base requirements. 1. Description of 2018 Work Plan for Expansion of the PPF Program BGE will target a total of forty (40) electric distribution feeders for reasonable remediation measures to improve the feeder performance level as part of its 2018 Expansion of the PPF Program. 38 BGE determined the list of feeders considering both system average interruption frequency index ( SAIFI ) and system average interruption duration index ( SAIDI ), and using a combination of data including and excluding major outage event 38 As of October 1, 2017, BGE had 1,305 distributions feeders on its electric distribution system. Three percent (3%) of feeders represents approximately thirty-nine (39) feeders (rounded up to the nearest integer). However, because of the selection methodology for the Expansion of PPF program, from which BGE selects one and a half percent (1.5%) of feeders from the list including all major outage event interruption data and one and a half percent (1.5%) of feeders from the list excluding major outage events, BGE identified a total of forty (40) feeders with twenty (20) feeders coming from each list when rounded up. 26

33 interruption data, as follows: 39 Incremental One and a Half Percent (1.5%) of Feeders Excluding Major Outage Event Interruption Data The feeders selected under the normal poorest performing feeder program are first excluded from the data set. The remaining feeders are then ranked by SAIFI using all interruption data excluding major outage event interruption data, excluding planned outage data, and excluding substation event data. The poorest performing two percent (2%) of feeders from this list are then ranked by SAIDI, with the top one and a half percent (1.5%) selected for remediation. Incremental One and a Half Percent (1.5%) of Feeders Including Major Outage Event Interruption Data The feeders selected under the normal poorest performing feeder program and the first incremental one and a half percent (1.5%) of feeders, excluding major outage event interruption data, are first excluded from the data set. The remaining feeders are then ranked by SAIFI using all interruption data excluding planned outage data and excluding substation event data. The poorest performing two percent (2%) of feeders from this list are then ranked by SAIDI, with the top one and a half percent (1.5%) selected for remediation. The following Table 20 includes a complete list of the forty (40) feeders, along with the substation, voltage, local jurisdiction, length of the feeder, and number of customers served by the feeder: The poorest performing three percent (3%) of feeders required under COMAR is determined by first ranking the feeders by SAIFI using all interruption data except major outage event interruption data, planned outage data, and substation event data for the twelve (12)-month period ending September 30. The poorest performing four percent (4%) of feeders based on SAIFI would then be ranked by SAIDI, with the top three percent (3%) selected for reasonable remediation measures. In order to allow the benefits of the remediation measures to go into effect, BGE will exclude feeders that underwent remediation over the previous twelve (12)-month period as part of the poorest performing three percent (3%) of feeders required under COMAR or the Expansion of the PPF program. COMAR (5) states that, No feeder ranked in the poorest performing 3 percent of feeders shall perform in the poorest performing 3 percent of feeders during either of the two subsequent 12-month reporting periods, after allowing one 12-month reporting period for the utility to implement remediation measures, unless the utility has undertaken reasonable remediation measures to improve the performance of the feeder. 40 Attached as Appendix K to this Annual Report is a list of the poorest performing three percent (3%) of feeders on BGE s system that BGE will target for reasonable remediation measures to improve the feeder performance level in 2018, as part of BGE s TRIP and as required under COMAR Attached as Appendix L to this Annual Report is information on the 2017 causes of interruptions for these feeders. 27

34 Table 20: Expansion of the PPF Program 2017 Feeder List Feeder Substation Voltage Mileage Customers County (kv) OH UG Total Served 8159 TEXAS 13 Baltimore CROWNSVILLE 13 Anne Arundel VIADUCT AVENUE 13 Baltimore , MEADOWS 13 Baltimore City , VAN BIBBER 13 Harford HIGHLAND 13 Montgomery HEREFORD 13 Baltimore , SHAWAN ROAD 13 Baltimore FALLSTON 13 Harford RIDGEVIEW 13 Anne Arundel , ELLICOTT CITY 13 Howard , COLDSPRING 13 Baltimore City , BESTGATE 13 Anne Arundel MOUNT WASHINGTON 13 Baltimore City WESTMINSTER 13 Carroll WILDE LAKE 13 Howard , OAKINGTON 13 Harford SHADYSIDE 13 Anne Arundel WILDE LAKE 13 Howard FRIENDSHIP MANOR 13 Howard , JACKSONVILLE 13 Baltimore MILL CREEK 13 Anne Arundel , CLIFTON PARK 4 Baltimore City HAVRE DE GRACE 13 Harford HOLLOFIELD 13 Baltimore OAKINGTON 13 Harford HILLEN ROAD 13 Baltimore , FOREST HILL 13 Harford , KINGSVILLE 13 Baltimore , ASHTON 1 13 Montgomery WAGNER MODULAR 13 Anne Arundel VAN BIBBER 13 Harford , CLIFTON PARK 4 Baltimore City REESE 13 Carroll TEN OAKS 13 Howard NAJ 13 Anne Arundel HOWARD 13 Howard , WESTMINSTER 13 Carroll NAJ 13 Anne Arundel , LIPINS CORNER 13 Anne Arundel ,659 Total ,172 The type and extent of remediation measures that BGE will perform on the above-list of feeders depends upon a number of factors, including, but not limited to, feeder configuration, 28

35 feeder conditions, reliability history, and cost. In order to identify specific feeder issues and the appropriate list of remediation measures to complete, BGE will first conduct a field inspections. Upon completion of the field inspection, BGE will prepare and issue work orders to perform enhanced vegetation management work and complete targeted reliability improvements, as appropriate, on the feeders to address specific reliability concerns. a. Field Inspection The first step involved with executing the Expansion of PPF Program is performance of a field inspection on each feeder included on the list of additional forty (40) feeders. As part of a field inspection of a feeder, BGE inspects overhead equipment and conductors, vegetation, and all three-phase pad-mounted equipment (both visually and through the use of infrared thermography). Such inspections allow BGE to identify and develop appropriate remediation measures to address specific reliability concerns. The following is a representative list of the types of items evaluated during the overhead line inspection process: Wildlife protection: e.g., missing or broken Cutouts: e.g., obsolete Westinghouse (brown porcelain) and defective Un-fused taps that are greater than or equal to two spans Insulators and pins: e.g., cracked, broken, missing Ground Wire: Broken or missing Lighting Arrestors: e.g., missing and defective Un-fused CSP transformers Transformer problems: e.g., leaks, signs of heat, broken bushings Broken or defective cross arms Lead pothead problems: e.g., leaking and flashed Pole condition: e.g., defective, rotten, leaning, needs to be guyed 29

36 Braces: e.g., missing, broken, need to be reattached Conductors: e.g., strands broken, splice defective, bird caging, re-sag, field spun aerial damaged Capacitor banks: e.g., damaged, leaking, blown fuses b. Enhanced Vegetation Management Vegetation interference with overhead lines and equipment represents the highest cause of overhead outages on the distribution system. As part of the tool kit for enhancing the reliability of the feeders identified in the Expansion of the PPF Program, BGE may perform surgical trimming of vegetation problem areas along feeders identified during field inspections, in accordance with BGE s surgical trimming guideline. Under this surgical trimming guideline, BGE removes all overhanging branches of weak-wooded species from above the lines of all three-phase feeder mains in open wire configurations. Additionally, BGE identifies and mitigates other portions of the feeder susceptible to tree-related outages. More aggressive vegetation management on poor performing overhead feeders will benefit customers by reducing the number of sustained customer interruptions caused by tree-related outages. c. Targeted Reliability Improvements As noted previously, the first step in executing the Expansion of the PPF Program is to perform a field inspection of each feeder, after which BGE will identify opportunities to enhance reliability through targeted reliability improvements. Accordingly, BGE cannot report on the specific reliability improvement work that it will execute on each feeder at this point in time. In the letter order that the Commission issued on December 17, 2014 in response to BGE s 2014 ERI initiative annual report, the Commission addressed this issue by directing BGE to make a separate filing by April 1 st of each year, limited to the Expansion of the PPF Program. BGE will file such a supplemental report with the Commission on or before April 2, 2018 for the

37 Expansion of the PPF Program, which will include feeder-specific work plans, milestones, and cost estimates. 41 Notwithstanding the absence of feeder-specific reliability improvement plans at this time, BGE anticipates that the scope of the reliability improvement work required for the 2018 Expansion of the PPF Program will be comparable in scope to the work that BGE completed as part of the 2017 Expansion of the PPF Program. Such work is detailed in the supplemental filing for the 2017 work plan that BGE made on April 3, 2017 under Maillog No Continuing with the remediation strategies utilized in the 2016 and 2017 programs, BGE plans to incorporate targeted remediation strategies for feeders that are underground, or have significant underground portions. Installation of pad-mounted DA Reclosers is one such option that BGE incorporated into the past program work plans and intends to continue as part of the 2018 program. 2. Historic Reliability Metrics and Projected Benefits for 2018 Expansion of the PPF Program The objective of the Expansion of the PPF Program is to improve reliability of the feeders identified to be the worst performing 3-6% of feeders on the system. To achieve this objective, BGE performs inspections and completes targeted reliability improvements on each feeder in the program to address outages typically experienced by these feeders. BGE will measure the effectiveness of the targeted reliability improvements by tracking the reliability performance of each feeder using industry standards in terms of SAIFI and SAIDI. Upon completion of the field inspection work, BGE will develop projected benefits for the 2018 Expansion of the PPF Program. BGE will include as part of its April 2018 supplemental report information on projected benefits for the 2018 Expansion of the PPF Program. 41 April 1, 2018 is a Sunday. 31

38 The following Table 21 provides historic reliability metrics for the forty (40) feeders selected for inclusion in the 2018 Expansion of the PPF Program: Table 21: 2018 Expansion of the PPF Program Feeder Reliability Performance 42 # Feeder Customers Served Average 2017 All Inclusive Excluding MOE All Inclusive Excluding MOE SAIFI SAIDI SAIFI SAIDI SAIFI SAIDI SAIFI SAIDI , , , , , , , , , , , , , , , Outage data used for determining poorest performing feeders exclude planned events and substation events for a 12-month period ending on September 30. As such, the annual reliability performance data shown are between periods of October 1 to September

39 # Feeder Customers Served Average 2017 All Inclusive Excluding MOE All Inclusive Excluding MOE SAIFI SAIDI SAIFI SAIDI SAIFI SAIDI SAIFI SAIDI , , Aggregate Performance of All 40 Feeders Attached as Appendix M to this Annual Report is information on the 2017 causes of interruptions for the above-listed feeders. The actual remediation measure(s) deployed by BGE, however, are largely based upon the outcome of the feeder-specific field inspections performed by BGE. 3. Milestones/Schedule and Preliminary Cost Estimate for 2018 Expansion of PPF Program The following major milestone schedule and total preliminary cost estimate for the forty (40) feeders identified as part of the 2018 Expansion of the PPF Program is based upon a start date of January 1, 2018: Table 22: 2018 Expansion of the PPF Program Major Milestones and Preliminary Cost Estimate Field Inspections Complete Vegetation Management Complete Corrective Maintenance Construction Complete As discussed above, upon completion of the required field inspection work, BGE will make a separate filing by April 2, 2018 that will provide feeder-specific milestones and cost estimates. 4. Similar Work to the Expansion of the PPF Program that BGE Plans to Complete in 2018 BGE will target a total of thirty-nine (39) electric distribution feeders for reasonable remediation measures to improve the feeder performance level as part of its 2018 TRIP. The following Table 23 reflects the preliminary cost estimate for BGE s 2018 TRIP: Total Preliminary Cost Estimate 03/ / / /2018 $2,270,000 33

40 Table 23: 2018 TRIP Preliminary Cost Estimate 2018 TRIP Preliminary Cost Estimate Inspection $120,000 Vegetation $620,000 Corrective Maintenance $760,000 Construction $1,180,000 Total $2,310,000 In the 2018 TRIP, BGE will inspect and remediate approximately one thousand one hundred fifty-three (1,153) miles of distribution circuit and equipment. B Diverse Routing Program Under the 2018 work plan for the Diverse Routing Program, BGE will diversely route the supply circuits for five (5) electric distribution substations. Doing so will increase the reliability and resiliency of the sub-transmission system, as these five (5) substations have a higher risk of experiencing outages because both of their supply circuits are located on the same overhead route. 43 As part of the Diverse Routing Program, BGE will route the supply circuits for the selected distribution substations on separate routes or through selective undergrounding of certain segments of the supply circuits, thus creating dual supply paths to the substation. 1. Description of 2018 Work Plan for Diverse Routing Program The following Table 24 lists the five (5) electric distribution substations for which BGE will diversely route their supply circuits as part of the 2018 Diverse Routing Program, along with the voltage, identity of the supply circuits, local jurisdiction primarily supplied by the substation, 43 In order to select distribution substations that could benefit the most from having their supply circuits diversely routed, BGE used a weighted scoring system to prioritize the project list. The system aggregates the following components: (1) 20% - based on the number of substation customers being diversely routed, (2) 10% - based on the total length of single rights-of-way footage eliminated, (3) 20% - based on the outage impact, consisting of the actual outages averaged over 5 years, or an assumed outage once in a 10-year period, and (4) 50% - based on the project cost divided by the number of customers impacted by a substation outage. 34

41 number of customers served by the substation, and the miles of common route the diverse routing project would eliminate: Table 24: 2018 Diverse Routing Program Substations Distribution Substation Round Bay & Mill Creek Glenn Burnie Mt. Wilson Voltage 34kV Supply Lines County # Customers Served Miles of Common Route Eliminated 34kV 33665, Anne Arundel 6, kV 34kV 33767, , , Anne Arundel 5, Baltimore 7, Willis School 34kV 33900, Montgomery 7, Totals 26, a. Round Bay & Mill Creek Substations As part of the 2018 Diverse Routing Program, BGE plans to diversely route the supply circuits that feed the Round Bay & Mill Creek Substations located in Anne Arundel County, Maryland. Round Bay & Mill Creek Substations have experienced four (4) loss of supply events in the four (4)-year period from January 1, 2013 through December 31, The following is an overview of the specific scope of work that BGE plans to perform in 2018 with respect to the Round Bay & Mill Creek substation supply circuits: Install two (2) DA reclosers at Round Bay to facilitate auto transfer to Feeder No Install one (1) tie DA recloser at the Feeder No and tie point to enable automatic transfers. Selectively underground Feeder Nos and to Mill Creek to support diverse routing. Reconductor the feeder into the Mill Creek substation to remove the legacy paper insulated, lead covered ( PILC ) cables. Install one (1) DA recloser on Feeder No to the pumping station to isolate single right-of-way exposure. 35

42 Diverse Routing work reconfigures the supply circuits into Round Bay and Mill Creek Substations such that: o o Mill Creek 33-2 is supplied by Lipins Corner Feeder No (Normal Supply) and Cedar Park Feeder No (Alternate Supply); and Round Bay supply does not change; however, remote/automated transfer to Feeder No out of Cedar Park is enabled. Figure A: Location of Round Bay & Mill Creek Substations b. Glen Burnie Substation As part of the 2018 Diverse Routing Program, BGE plans to diversely route the supply circuits that feed the Glen Burnie Substation located in Anne Arundel County, Maryland. Glen Burnie Substation has experienced two (2) loss of supply events in the four (4)-year period from January 1, 2013 through December 31, The following is an overview of the specific scope of work that BGE plans to perform in 2018 with respect to the Glen Burnie Substation supply circuits: 36

43 Reconfigure the distribution system to bring Feeder No out of Lipins Corner to Glen Burnie. Install new underground pole and switches and resupply the Glen Burnie transformers. Install line tension maintenance disconnect switches to support system maintenance. Install load interrupting switches and DA reclosers before Feeder No main at Lipins Corner to reduce reliability exposure. Diverse Routing work reconfigures the supply circuits into Glen Burnie Substation such that: o o Glen Burnie 33-1 is supplied by Shipley Feeder No (Normal Supply) and Lipins Corner Feeder No (Alternate Supply); and Glen Burnie 33-2 is supplied by Shipley Feeder No (Normal Supply) and Lipins Corner Feeder No (Alternate Supply). Figure B: Location of Glen Burnie Substation 37

44 c. Mount Wilson Substation As part of the 2018 Diverse Routing Program, BGE plans to diversely route the supply circuits that feed the Mount Wilson Substation located in Baltimore County, Maryland. Mount Wilson Substation has experienced two (2) loss of supply events in the four (4)-year period from January 1, 2013 through December 31, The following is an overview of the specific scope of work that BGE plans to perform in 2018 with respect to the Mount Wilson Substation supply circuits: Reconfigure the distribution system to bring Feeder No out of Sudbrook Park to Mt. Wilson. Install line tension maintenance disconnect switches. Install two (2) DA reclosers to remove common right-of-way exposure. Diverse Routing work reconfigures the supply circuits into Mount Wilson such that: o Mt. Wilson 33-1 is supplied by Dolfield Feeder No (Normal Supply) and Sudbrook feeder (Alternate Supply); and o Mt. Wilson 33-2 is supplied by Dolfield Feeder No (Normal Supply) and Sudbrook feeder (Alternate Supply), 38

45 Figure C: Location of Mount Wilson Substation d. Willis School Substation As part of the 2018 Diverse Routing Program, BGE plans to diversely route the supply circuits that feed the Willis School Substation located in Montgomery County, Maryland. Willis School has experienced two (2) loss of supply event in the four (4)-year period from January 1, 2013 through December 31, The following is an overview of the specific scope of work that BGE plans to perform in 2018 with respect to the Willis School Substation supply circuits: Install one (1) DA recloser to reduce common right-of-way exposure Selectively underground Feeder No to reduce the common right-of-way exposure. Install additional load interrupting switches. 39

46 Install line tension maintenance disconnect switches to support system maintenance. Correct legacy design practices which negatively impact reliability. Diverse Routing work modifies the supply construction into the Willis School Substation to reduce 44 common right of way expose and maintain current supply circuits such that: o Willis School 33-1 is supplied by Sandy Springs Feeder No (Normal Supply) and Sandy Springs Feeder No (Alternate Supply); and o Willis School 33-2 is supplied by Sandy Springs Feeder No (Normal Supply) and Sandy Springs Feeder No (Alternate Supply). Figure D: Location of Willis School Substation 44 A small amount of common right of way exposure will remain due to the presence of a 230kV transmission circuit. 40

47 2. Historic Reliability Metrics and Projected Benefits for 2018 Diverse Routing Program The objective of the Diverse Routing Program is to improve reliability and resiliency by reducing the number of loss of supply events for distribution substations whose supply circuits are on single rights-of-way. Such a reduction in the loss of supply events, in turn, will reduce the number of customer interruptions from a single point of failure. BGE will measure the effectiveness of the Diverse Routing Program by analyzing the number of loss of supply events avoided as a result of diversely routing its supply circuits on separate routes or by selectively undergrounding segments of the supply circuits. The following Table 25 provides historic reliability data and projected benefits for each of the substations on which BGE plans to deploy a diverse routing solution under the 2018 work plan for the Diverse Routing Program: 41

48 Table 25: 2018 Diverse Routing Program Historic Reliability Data and Projected Benefits Distribution Substation 34kV Supply Lines Loss of Supply Events Projected Average Benefits From One Loss of Supply Event 45 ACI ACMI Round Bay & Mill Creek 33665, , ,024 Glenn Burnie 33767, 33768, , ,427 Mt. Wilson 33630, 33632, 33635, , ,243 Willis School 33900, , ,361 A large number of customers are served by the substations targeted by the 2018 diverse routing projects. Based on the substantial number of loss of supply events during the four (4)-year period from January 1, 2013 through December 31, 2016, the risk of a significant customer impact as a result of a future loss of supply supports the completion of these reliability improvement projects. 3. Milestones/Schedule and Cost Estimates for 2018 Diverse Routing Program The following major milestone schedule and cost estimates for the five (5) electric distribution substations for which BGE will diversely route their supply circuits in 2018 as part of the Diverse Routing Program is based upon a start date of January 1, 2018: 45 In an effort to comply with the Commission s directive for BGE to provide projected benefits on a project basis, BGE has attempted to estimate the reliability benefits in terms of ACI and ACMI for each substation that will have its supply circuits diversely routed under the 2018 Diverse Routing Program. These estimates are established on the basis of the potential number of customers at risk from a loss of supply event on the substation. While BGE will diversely route supply circuits with the intent of eliminating the customer interruptions from outage events affecting the portions of the circuits located on the same overhead route, BGE cannot predict with a reasonable degree of certainty that the affected route will experience the same types and level of outages in the foreseeable future. The impact of such variability is particularly significant when viewing a very limited data set such as that of an individual supply circuit. For these reasons, it is important to measure the overall benefits of the Diverse Routing Program on an aggregate level. BGE, however, will track the number of loss of supply events avoided for each substation to measure the benefits in terms of ACI and ACMI for each substation to which the supply circuits are diversely routed. 42

49 Table 26: 2018 Diverse Routing Program Major Milestones and Estimated Expenditures Substations 34kV Supply Lines Construction Complete 2018 Estimated Expenditures Round Bay & Mill Creek 33665, /2018 $1,800,000 Glenn Burnie 33767, 33768, /2018 $560,000 Mt. Wilson 33630, 33632, 33635, /2018 $730,000 Willis School 33900, /2018 $1,660,000 Total $4,750, Similar Work to the Diverse Routing Program that BGE Plans to Complete in 2018 At this time, BGE has no plans to complete any diverse routing projects in 2018 outside of the Diverse Routing Program and associated ERI initiative surcharge mechanism. C Selective Undergrounding Program Under the 2018 work plan for the Selective Undergrounding Program, BGE will selectively underground portions of five (5) existing overhead electric distribution feeders. Selective undergrounding of overhead distribution lines improves the reliability and resiliency of the distribution system by eliminating the number of sustained customer interruptions caused by outage events typically affecting the overhead system, such as tree contact, vehicle pole hits, and wildlife. Selective undergrounding is not a universally feasible or practical solution to address reliability concerns. For example, in certain environments, such as flood zones, underground conversion does not provide added reliability benefits and would require an alternative solution to address reliability concerns, such as the use of overhead tree wire. Identifying appropriate selective undergrounding projects, thus, requires BGE to consider a number of factors, including the following: historical outages and causes to determine frequency, duration, and location of outages; 43

50 tree-related outages where tree trimming has not improved reliability; work that provides safety improvement to inaccessible BGE equipment; availability of roadway and clear access to work on underground equipment; ability to obtain rights to install new equipment such as underground cable and pad-mounted enclosures; the cost of enhancements, the cost of future maintenance and the number of customers impacted; and future system expansion. BGE considered the above-list of factors in choosing the five (5) selective undergrounding projects for completion in 2018 under the Selective Undergrounding program. 1. Description of 2018 Work Plan for the Selective Undergrounding Program The following Table 27 lists the five (5) locations at which BGE will perform selective undergrounding work in 2018 as part of the Selective Undergrounding Program, along with the relevant feeder number, the neighborhood and local jurisdiction in which the selective undergrounding work will occur, number of customers served by the feeder, estimated number of customers that will directly benefit from the work, and the number of miles to be selectively undergrounded: Table 27: 2018 Selective Undergrounding Program Project List Feeder Neighborhood County Feeder Customers Served # Customers Benefited 8475 Crownsville / Hawkins Road Anne Arundel Gunpowder Point Harford Tridelphia Woods Howard Ellicott City / Rogers Avenue Howard Millers Island Park / Swan Point Baltimore UG Miles Totals 5,077 2,

51 a. Hawkins Road Selective Undergrounding Project As part of the 2018 Selective Undergrounding Program, BGE plans to selectively underground a portion of Feeder No in the community along Hawkins Road in the Crownsville area of Anne Arundel County. During the four (4)-year period from January 1, 2013 through December 31, 2016, the targeted portion of Feeder No experienced ten (10) different outage events that resulted in one thousand four hundred fifty-five (1,455) sustained customer interruptions. The following is an overview of the specific scope of work that BGE plans to perform in 2018 as part of this Selective Undergrounding Project: Resupply the existing overhead customers by installing 2,870 of underground cable to remove exposed overhead wire in a wooded area supplying the community along Hawkins Road in the Crownsville area. 45

52 Figure E: Hawkins Road Selective Undergrounding Project Location b. Gunpowder Point Selective Undergrounding Project As part of the 2018 Selective Undergrounding Program, BGE plans to selectively underground a portion of Feeder No in the Gunpowder Point community of Harford County. During the four (4)-year period from January 1, 2013 through December 31, 2016, the targeted portion of Feeder No experienced four (4) different outage events that resulted in one thousand seven hundred thirty-six (1,736) sustained customer interruptions. The following is an overview of the specific scope of work that BGE plans to perform in 2018 as part of this Selective Undergrounding Project: 46

53 Figure F: Resupply the existing overhead customers by installing 2,085ʹ of underground cable to remove exposed overhead wire in a wooded lot-line area supplying the community of Gunpowder Point. Gunpowder Point Selective Undergrounding Project Location c. Tridelphia Woods Selective Undergrounding Project As part of the 2018 Selective Undergrounding Program, BGE plans to selectively underground a portion of Feeder No in the Tridelphia Woods community of Howard County. During the four (4)-year period from January 1, 2013 through December 31, 2016, the targeted portion of Feeder No experienced seventeen (17) different outage events that resulted in four thousand nine hundred sixty-eight (4,968) sustained customer interruptions. The 47

54 following is an overview of the specific scope of work that BGE plans to perform in 2018 as part of this Selective Undergrounding Project: Figure G: Resupply the existing overhead customers by installing 3,600ʹ of underground cable to bypass a heavily treed area along Tridelphia Road in the community of Tridelphia Woods. Tridelphia Woods Selective Undergrounding Project Location d. Rogers Avenue Selective Undergrounding Project As part of the 2018 Selective Undergrounding Program, BGE plans to selectively underground a portion of Feeder No in the community along Rogers Avenue in the Ellicott City area of Howard County. During the four (4)-year period from January 1, 2013 through December 31, 2016, the targeted portion of Feeder No experienced four (4) different outage events that resulted in three thousand seven hundred thirty (3,730) sustained customer 48

55 interruptions. The following is an overview of the specific scope of work that BGE plans to perform in 2018 as part of this Selective Undergrounding Project: Figure H: Resupply the existing overhead customers by installing 600ʹ of underground cable to bypass a heavily treed area along Rogers Avenue that supplies all customers on the feeder in this community within Ellicott City. Rogers Avenue Selective Undergrounding Project Location e. Millers Island Park / Swan Point Selective Undergrounding Project As part of the 2018 Selective Undergrounding Program, BGE plans to selectively underground a portion of Feeder No in the Millers Island Park and Swan Point communities of Baltimore County. During the four (4)-year period from January 1,

56 through December 31, 2016, the targeted portion of Feeder No experienced six (6) different outage events that resulted in one thousand two hundred fifty-four (1,254) sustained customer interruptions. The following is an overview of the specific scope of work that BGE plans to perform in 2018 as part of this Selective Undergrounding Project: Figure I: Resupply the existing overhead customers by installing 7,000ʹ of underground cable to bypass a heavily treed area and loop a feeder tap for the communities of Millers Island Park and Swan Point. Millers Island Park / Swan Point Selective Undergrounding Project Location 50

57 2. Historic Reliability Metrics and Projected Benefits for 2018 Selective Undergrounding Program The objective of the Selective Undergrounding Program is to improve reliability and resiliency on selected portions of the overhead distribution system by reducing the number of sustained customer interruptions caused by outages that typically affect the overhead system. BGE will measure the effectiveness of the Selective Undergrounding Program by analyzing the number of sustained customer interruptions experienced by customers whose supply lines were partially or completely undergrounded as part of this program. The following Table 28 provides historic reliability data and projected benefits for each of the locations at which BGE plans to perform selective undergrounding work as part of the 2018 Selective Undergrounding Program: 51

58 Table 28: 2018 Selective Undergrounding Program Historic Reliability Data and Projected Benefits Feeder 8475 Neighborhood Crownsville / Hawkins Road Customers Served Customers Benefited All Inclusive Total # Events Total Customer Interruptions Projected Average Benefits per Event 46 ACI ACMI , , Gunpowder Point , , Tridelphia Woods , , Ellicott City / Rogers Avenue Millers Island Park / Swan Point , , , , Milestones/Schedule and Cost Estimates for 2018 Selective Undergrounding Program The following major milestone schedule and cost estimates for the five (5) selective undergrounding projects that BGE plans to complete as part of the 2018 Selective Undergrounding Program is based upon a start date of January 1, 2018: 46 In an effort to comply with the Commission s directive for BGE to provide projected benefits on a project basis, BGE has attempted to estimate the reliability benefits in terms of ACI and ACMI on each feeder that BGE will complete selective undergrounding work. These estimates are established strictly on the basis of the number of customers benefited i.e., those customers who previously experienced a significant number of interruptions from overhead related outages, but will no longer do so because previously affected overhead portions of the feeder have been selectively undergrounded. If the affected customers experience any outages on portions of the feeder that have been selectively undergrounded or otherwise mitigated, BGE will account for those outages by deducting the associated customer interruptions and customer minutes of interruption from the ACI and ACMI estimates. For these reasons, it is important to measure the overall benefits of the Selective Underground Program on an aggregate level. BGE, however, will track the number of outages on portions of the feeder that are being selectively undergrounded to measure the benefits of each project in terms of ACI and ACMI. 52

59 Table 29: 2018 Selective Undergrounding Program Major Milestones and Estimated Expenditures Feeder Neighborhood Construction Complete Planned Designed Estimates 8475 Crownsville / Hawkins Road 08/2018 $190, Gunpowder Point 10/2018 $490, Tridelphia Woods 10/2018 $560, Ellicott City / Rogers Avenue 08/2018 $210, Millers Island Park / Swan Point 08/2018 $330,000 Total $1,780, Similar Work to the Selective Undergrounding Program that BGE Plans to Complete in 2018 In 2018, BGE currently plans to selectively underground approximately eighteen (18) miles of overhead wire located on existing 13kV electric distribution feeders outside of the Selective Undergrounding Program and associated ERI initiative surcharge mechanism. Such selective undergrounding work will be performed by BGE as part of other reliability improvement programs. BGE estimates that the total cost to perform this work will be approximately $10,700,000. VIII REVENUE REQUIREMENT AND RATE DETAILS BGE has calculated a 2018 revenue requirement for the ERI initiative of $8.1 million. 47 This revenue requirement reflects a true-up of prior estimated and actual expenditures, with the difference between actual costs and forecasted expenditures accruing interest at BGE s electric rate of return set by the Commission in Case No. 9406, BGE s last base rate case proceeding, as 47 The revenue requirement is calculated based upon the level of expenditures that BGE anticipates incurring in

60 well as the estimated 2018 expenditures to execute 2018 ERI initiative work plan. 48 As shown in the following Table 30, the annual revenue requirements for the ERI initiative have tracked favourably against the revenue requirements considered by the Commission as part of its approval of the ERI initiative in Order No : Table 30: ERI Initiative Revenue Requirement History Program Year Order No Revenue Requirement Actual Program Year Revenue Requirement 2014 $2.3 million $1.4 million 2015 $4.9 million $4.4 million 2016 $7.1 million $4.8 million 2017 $8.3 million $7.3 million $9.5 million $8.1 million BGE has also calculated a volumetric rate for each of the customer classes subject to the ERI initiative surcharge mechanism. Attached as Appendix N to this Annual Report are (1) detailed calculations for the 2018 revenue requirement, (2) detailed calculations for the 2018 volumetric rates for each customer class, and (3) Supplement 609 to P.S.C. Md. E-6, Rider 31 Electric Reliability Investment ( ERI ) initiative Charge ( Supplement 609 ). Supplement 609 sets forth the revised Rider with the newly proposed rates to be effective January 1, The updated cost estimates for the 2016 and 2017 ERI initiative work plans are based upon actual financial information available in BGE s accounting systems as of September 30, 2017 and projected expenditures remaining for the 2016 and 2017 ERI initiative work plans, which includes the multi-year Queen Anne & Mitchellville diverse routing project from the 2016 ERI initiative work plan that was completed as scheduled in In connection with the 2018 ERI initiative annual report and calculation of a 2019 revenue requirement, BGE will true-up the updated cost estimates and actual expenditures for the 2016, 2017, and 2018 work plans, with the difference between actual costs and forecasted expenditures accruing interest at BGE s electric authorized rate of return. 49 As reported on April 3, 2017, Case No Electric Reliability Initiative (ERI) Updated Report on 2017 Expansion of the Poorest Performing Feeders Program, Mail Log

61 The proposed volumetric rates, which would be effective from January 1, 2018 until December 31, 2018 (or until such time as new ERI initiative surcharge rates are approved), 50 are as follows: Customer Class Rate effective 1/1/18 (per kwh) R RL G/GU GS GL/GLP P The residential rate is estimated to equate to a monthly charge of $0.32 for the average residential customer using 925 kwh per month. Finally, along with the updated work plan and cost estimates for the 2018 Expansion of the PPF Program that BGE will file with the Commission by April 1, 2018, BGE will provide a revised revenue requirement and rate calculations for the 2018 ERI initiative. To the extent that the revised revenue requirement and rate calculations have a meaningful impact on the 2018 approved ERI surcharge rates, BGE anticipates that it would request a corresponding change in the ERI surcharge rates for the remainder of The proposed rates are based upon forecasted billing determinants from January 1, 2018 December 31,

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