Commission grants full waiver of BGE penalty to American Sugar after debate over good‑faith efforts

The Public Service Commission on Sept. 3 granted American Sugar Refining Inc. a full waiver of a roughly $1.1 million penalty assessed by Baltimore Gas and Electric (BGE) for gas consumption during a Jan. 20–23, 2025 curtailment event. Commissioners said the record showed the company undertook pre‑event preparations, the failure was short‑lived and corrective actions were taken promptly.

Evan Thomas, staff attorney, explained that American Sugar requested a waiver under Schedule IS, which permits the commission to reduce or waive penalties where a customer demonstrates a good‑faith effort to interrupt usage. Staff found American Sugar undertook extensive pre‑event preparations, maintained dual‑fuel capability and initiated post‑event upgrades; staff recommended a full waiver.

Representing American Sugar, counsel Roberta James described measures the company had taken over several years to prepare its facility to run boilers on oil during curtailments and emphasized that the company curtailed gas for 68 of the 72 hours of the event. "The evidence in this case shows that in order to ensure its facility was prepared for any curtailment, it spent four years ... ensuring that it was prepared for the curtailment event," James said, and she contrasted the 2,253 therms consumed during the event with the company’s typical 72‑hour usage of roughly 200,000 therms.

The Office of People's Counsel (OPC) argued against a full waiver and urged a partial penalty to preserve compliance incentives. An OPC representative said penalties serve to ensure interruptible service is not treated as firm service and to encourage reinvestment in plant reliability; OPC recommended that waivers generally not exceed 50% of an assessed penalty and suggested a partial penalty of about $500,000 in this case.

Commissioners questioned the mechanics of the tariff penalties and whether both a distribution penalty and an excessive‑use penalty could apply; BGE clarified the higher of the two applies and that American Sugar had been assessed the excessive‑use penalty. Commissioners discussed proportionality — whether a single therm of consumption triggers the distribution penalty and how the tariff’s 575‑therm threshold applies to large industrial customers. Several commissioners said the small proportion of usage in this event, combined with the company’s preparations and prompt corrective actions, weighed in favor of relief.

Members of American Sugar’s operations team described the cause as freezing of pneumatic lines on fan positioners in very low temperatures, an unforeseen problem that had not appeared in prior runs and that the company has since addressed by upgrading heat trace systems.

After discussion, the chair moved to grant a waiver of the assessed penalty. Commissioners recorded unanimous votes in favor. The commission’s order grants the waiver and staff will document the finding that, on the record before the commission, American Sugar demonstrated good‑faith efforts and initiated corrective and preventive measures.