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Pepco seeks recovery of some costs after Livingston battery pilot cancelled; staff cites vendor non‑performance
Summary
Pepco told the Commission it seeks recovery of roughly $2 million in internal labor and overhead after the Livingston Road battery storage pilot was canceled; staff and company testimony showed the vendor missed specifications and the project was cancelled while staff recommends disallowing internal labor and overhead costs.
Pepco is seeking recovery of about $2 million related to the Livingston Road battery energy storage project that the company cancelled after vendor performance and technical specification problems, company witnesses and staff said at the Public Service Commission hearing.
Pepco witness Jacqueline Young and staff witness Roger Austin described the Livingston pilot as a battery energy storage project at the Livingston Road site. Young testified the company incurred costs in developing the project but later canceled it; the company now seeks to recover $2 million attributed to internal labor, overhead and materials/contracting costs.
Staff and intervenors pressed the company about the reasons for cancellation. Young said Pepco cited vendor non‑performance, delivery of lithium‑ion batteries that did not meet technical requirements (lack of required gas detection and missing water piping for battery cabinets), and a changed load forecast that removed the original need asserted when the project was proposed. Staff witness Austin told the panel he recommended disallowing recovery of internal labor and overhead related to Livingston because staff had previously concluded the project was not cost effective.
Young said the company had attempted to work with the vendor but that the project team considered the vendor unresponsive; she described the selection process (direct award in this case for a specialty vendor) and said the company could pursue alternative procurement structures, and that contracts sometimes include financial incentives or penalties though she did not know specifics for this vendor agreement.
Why it matters: Pepco requests recovery for canceled pilot costs as part of its reconciliation. Staff recommends disallowance of internal labor and overhead while allowing material costs if they can be used in other projects. The Commission must weigh whether costs of canceled projects should be borne by ratepayers or absorbed by the company when cancellations result from vendor failure or changed circumstances.
Next steps: Staff and intervenors have moved documents into the record, and the hearing record will include the company cancellation notice, discovery responses and witness testimony about vendor performance and procurement practices.
