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BGE at 200

MOVING SMART ENERGY FORWARD: BGE at 200

MOVING SMART ENERGY FORWARD:

KUMMEROW AND BLAIR


BGE 200 YEARS

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Baltimore Harbor ca. 1950

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BGE 200 YEARS Moving Smart Energy Forward A History 1816–2016

Burton Kummerow and Mary Blair

The Maryland Historical Society Press Baltimore, Maryland

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THE BALTIMORE GA S AND ELEC TRIC 20 0 th ANNIVERSARY BO OK IN PARTNERSHIP WITH THE M ARYL AND HISTORIC AL SO CIET Y

© 2016 The Maryland Historical Society Press All Rights Reserved

Designed by Alex Castro, Chestertown, Maryland Printed in the United States of America The Maryland Historical Society Press 201 W. Monument Street Baltimore, MD 21201

ISBN #978-0-9965944-5-5

Small title page: A section of a large group of Consolidated workers assembled at Front Street, ca. 1916 (see Chapter 7 for the full photograph). Pages 2–3: Baltimore Harbor ca. 1950 Frontispiece: The Lexington Street headquarters building illuminated for one of BGE’s earlier anniversaries.

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Table of Contents Isabel Strikes; BGE is Ready

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Introduction: Two Centuries of Challenges Lead to Success

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Five Pillars Based on Financial Responsibility

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Safety

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Reliability

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Distinctive Customer Service

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Diversity and Inclusion

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Innovation and Efficiency

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Baltimore in 1816

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Chapter 1: The Magic of Gaslight

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Chapter 2: The Gas Light Company of Baltimore Grows Slowly 1816–1861

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Chapter 3: Civil War and Competition 1861–1880

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Chapter 4: Electricity Brings More Competition and Consolidation Wins the Day 1881–1906

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Chapter 5: Financial Responsibility

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Chapter 6: Consolidation—Through Two World Wars 1906–1945

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Chapter 7: Who Does the Work? Diversity and Inclusion

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Chapter 8: Safety

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Chapter 9: Reliability

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Chapter 10: A Golden Age 1946–1970

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The Era of Smart Energy 1970-2016

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Chapter 11: Protecting the Environment and Delivering the Power

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Chapter 12: Deregulation: BGE Is Reborn as a New Company

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Chapter 13: Innovation and Efficiency

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Chapter 14: Distinctive Customer Service

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Chapter 15: Community—BGE and Central Maryland:

More than Half a Century of Philanthropic Partnership

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Chapter 16: BGE Charting a Bright Future

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BGE 200th Anniversary Timeline

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Acknowledgments

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Foreword With two centuries of American history recorded in its archives, the Baltimore Gas and Electric Company (now BGE) has an amazing pedigree. Only a handful of U.S. companies can boast such longevity. Back in 1816, when the country was only four decades old, a parlor trick quickly became a new company. Much to their credit, Baltimore city fathers and an artist turned museum director introduced gas streetlights and began to banish darkness from dangerous city streets. Groundbreaking pioneers, the leaders of the Gas Light Company of Baltimore, created a new technology and a new business. As the Company slowly grew throughout the 1800s, it faced competition and ignorance, politics and wars, and a new technology,—electricity—which threatened to make the gas business obsolete. The 20th century brought consolidation and growing success. The Consolidated Gas and Electric Power Company became a regulated utility as the Baltimore region grew through two world wars. Everyone began to take for granted the power that made modern living possible. At the same time, the suspicion of monopolies remained. Late in the 1900s, the renamed BGE faced the challenges of environment and deregulation. As it begins a third century, a venerable company looks to the future with continued excellence and confidence. How has Central Maryland’s utility company lasted so long? Over 200 years, it has consistently featured strong, intelligent leadership, smart investment in technology and infrastructure, and talented and loyal employees on all levels. It has also been a partner and good neighbor with its region, through turbulence and prosperity, booms and busts. The ten or so generations of BGE history make for a rich story that mirrors its home town. The Maryland Historical Society is honored to have been chosen to tell BGE’s story during the Company’s 200th Anniversary celebration. With great respect for its success— past, present, and future—we offer this unique and important Baltimore tale. — Burton Kummerow and Mary Blair

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I am honored and humbled to be CEO of BGE. Honored to represent 3200 talented and dedicated men and women. Humbled to be the leader of a company with a 200year legacy. If the founders of our Company—then called the Gas Light Company of Baltimore— were able to look this far into the future, they may not have imagined the shape the Company or world would take. Serving our customers is why we exist. Our customers are living in a very different world now, and their needs and expectations of their utility company have changed greatly. Through your hard work and dedication, BGE has kept up with them every step of the way. Our recent accomplishments include the completion of one of the largest technology projects in the Company’s history, our smart grid initiative, which involved upgrading almost 2 million gas and electric meters across our entire service area. With smart grid technology, customers now have tools that enable them to take control of their energy use and better manage their bills. We predict that our investment in smart grid will lead to more than $1.5 billion in savings for our customers over the next decade. While saving a significant amount on energy bills directly improves customers’ personal circumstances, there is also a positive effect on the local economy. BGE has grown and proven to be a notable economic force for Central Maryland. A study by the Economic Alliance of Greater Baltimore found that BGE generates close to $4 billion dollars for the area annually, through activities

including procurement and charitable giving in addition to energy management programs. As our employees are extremely civic-minded, you can be proud that we directly invest funds into the communities where we operate, using dollars from our parent company’s shareholders to support more than 300 non-profit organizations each year. Our grants underwrite education, cultural and environmental programs, as well as critical safety and emergency services. However, the efforts of the BGE team are truly what makes a difference. BGE employees volunteer almost 25,000 hours each year, working to improve the quality of life for our neighbors. Many current employees were here to celebrate BGE’s 175th anniversary, and we hope that many of today’s employees will celebrate the next milestone 25 years from now. This Company pride is at the core of BGE, and the key to us moving smart energy forward. I am personally very excited about what the future holds. BGE’s ability to evolve and innovate will remain critical to meeting our customers’ high expectations. As you read this 200th Anniversary book, please take a moment to recognize your role in helping BGE achieve its 200th year birthday. Thank you for making BGE the company it is today and for setting it up for a bright future. Sincerely,

Calvin G. Butler Jr. Chief Executive Officer BGE

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September 18, 2003

BGE faced Hurricane Isabel, fully prepared for the first great storm of the 21st Century

“Lessons learned from the 1998 Hurricane Floyd led to preparations allowing BGE to restore power to 300,000 additional outages in the same eight-day period of time.”

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— Stephen Woerner, President and Chief Operating Officer, BGE


Much of the waterfront in Baltimore and Annapolis (above) was underwater. (Photograph courtesy Don Boesch, UMCES) Nearly 800,000 BGE customers lost power. Four hundred poles, 300 transformers, and 100 miles of wire were down and out. It was a watershed moment for BGE. More than in previous storms, detailed planning and preparations were completed before the emergency. The entire workforce was on call. Thousands of electric and gas field teams, office workers, and other support staff worked day and night during the crisis. Eight days and 710,000 emergency calls later, power was restored throughout Central Maryland, a groundbreaking achievement in a new era. Storms like the terrible Derecho and Hurricane Sandy in 2012 have continued to prove BGE’s vigilance and preparations.

More than 5400 BGE and Constellation workers joined 2900 utility workers from out of state to restore the power lines. The BGE storm center stayed in touch with city and state emergency centers. A website told customers how to prepare. Calls helped track the storm, and customers who called in received no busy signals.

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Introduction: Two Centuries of Challenges Lead to Success “The history of many successful businesses is one of organically evolving chaos.”

— Frank Heintz, Former Chief Executive Officer, BGE

BGE is the direct lineal descendant of the display of gaslight by Rembrandt Peale in 1816. Between that first illumination and the subsequent formation of a utility company dedicated to delivery were both intelligent directions and missteps. Over 43 different companies emerged, grew, dwindled, or were bought in the subsequent 200 years, each vying with others to gain a market share in Central Maryland and deliver an increasingly necessary product to residential customers and industry. Success follows different routes and appears in different forms. A 200-year record of continuity has not been a straight line. As a founding institution of the Baltimore region, BGE stands as a remarkable accomplishment among all utility companies.

1816–1910

The century of competition The lineal descent may be direct, but the path to the current success and leadership of BGE was not always clear. The first directors had barely an idea about this new gas, but they did obtain a charter and a contract with the City to light the streets. They had no engineering skills, no ideas about the process of producing and storing gas on a commercial scale, no understanding of delivery, no equipment, no place to buy equipment from, and no one in the United States to ask.

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They sold shares, mostly to each other and their friends, and they learned the rest by trial and error. The company had a handful of customers in addition to the City. It took 19 years to lay 2 miles of pipe and 10 years to pay the most modest dividend to the initial stockholders. They also had, quite fortuitously, 45 years of production and delivery without a competitive challenge, so when the challenge came, they were quite prepared to defend their achievement. In the early 1800s Baltimore was the third largest city in the United States. Its port was a hub of trade, and the availability of jobs made the town a magnet for immigrants. Once folks grasped that illuminated streets were better than darkness and they overcame fear of explosions, there were opportunities for the gas business. Gas became a necessity, and the public craved it but complained loudly about being in the grip of a monopoly company.

The new technology of electricity, arriving in 1881, created a swarm of business opportunities, exceeding anything that the gas business had experienced. Initially the gas business saw the electric companies only as competitors in providing lighting. It took some time to identify and market a useful product that they alone could deliver. The Bunsen burner had made the gas stove possible. Heating and cooking were the real future. The competing gas and electric companies vied with each other for customers and territories, slowly realizing that competition would only lead them in two directions: remaining in a fixed geographical area or engaging in ruinous price wars. The general public had trusted competition to create fair pricing, but instead competition had produced incompatible delivery systems, masses of overhead wires, streets torn up for new gas mains, and widely varying prices. Reluctantly, city fathers accepted that the production of power for home and

The Great Fire of 1904 started in the Hurst Building on Hopkins Place and devastated downtown Baltimore. A total of 1500 buildings over 140 acres were lost. The underground gas system survived intact, but the overhead electric wires strung between poles were destroyed.

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With many reforms and improvements, a modern Baltimore grew out of the ashes of the Great Fire of 1904. By the mid 20th century, it was the sixth largest city in the nation.

business must be a “natural monopoly” and safeguards of the public interest must be developed. The three gas companies merged in 1880 to form a single Consolidated Gas Company of Baltimore City. Gas delivery survived intact through the fire of 1904, but electric companies did not. They had a chance to remake themselves with a better infrastructure. In 1906 the Consolidated Gas Electric Light and Power Company of Baltimore emerged, bringing gas and electricity into a single company for production and delivery of power to Baltimore. The Public Service Commission was created in 1910, with the mission of overseeing and regulating monopolies in the interest of the citizens. This unification produced an effective single source for power for Baltimore and the acceptance of a regulated company.

1910–2016

The century of a regulated utility

The challenges of the 20th century were of a different order. Baltimore was more than a town of traders and merchants. Its location as a growing industrial center created conditions for Consolidated to thrive. The Company marketed many new appliances into the 1920s,

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primarily to middle-class women, and demands for production increased. Both world wars and the Great Depression put a damper on the growth of residential electricity, but the demand for increased power exploded in the 1950s as the new suburbs grew. The availability of new and dandy appliances was unprecedented. Consolidated did not need to raise rates; it only needed to sell more power. These were the golden years, and the profits of Consolidated testified to that. Initial environmental signs—smog in California and acid rain in New England—indicated that the growth of coal-fired generation could not continue unabated. Emissions did not stay within the boundaries of the state that produced them. In 1970 Congress passed the Clean Air Act, a major piece of federal legislation to regulate emissions that came primarily from electric generating plants. Baltimore Gas and Electric (a new branding in 1955),* moved to make lowered emissions compatible with good financial management and to invest in new technologies for producing power. It built efficient new coal-burning

* BG&E designates the Company until 1993 when BGE is adopted.


plants, put scrubbers in the stacks of older plants, and built a nuclear generating plant at Calvert Cliffs, all to meet the energy needs of the region. Given its massive infrastructure, change was as efficient as turning an aircraft carrier. Developing a for-profit entity, Constellation Energy Group, within the regulated utility initiated a new strategy. Deregulation of several major industries—airlines, banks, telephone—arrived in the 1980s. The drive to

deregulate the price of energy started in California, where local prices were higher than those outside the state. Deregulation turned energy into a competitively traded commodity and required a new level of management skills. Regulation had sought to create a level playing field, but it did not stay level. When the Maryland deregulation legislation passed in 1999, the Company, the customers and the whole industry went through a sea change. Customers could buy their energy on the open market at competitive prices. BGE, once the parent company of Constellation, was now restructured as the child. BGE had been the owner of nine energy generating plants. They were sold as BGE became an efficient, customer-centered delivery system of pipes, wires, and skilled employees. The merger and acquisition pattern of the 19th century echoed yet again when BGE became an Exelon company in 2012. Success takes different routes and appears in different guises. A 200-year record as a foundation institution of Baltimore stands as a remarkable accomplishment among utility companies. Success for BGE is a product of circumstances, technological innovations, intelligent leadership, loyal employees, and a prideful determination that the massive infrastructure it manages delivers safe, reliable, clean, and cost effective energy. Today’s Company, rooted in its historical home in Central Maryland, has become a leading citizen, dedicated to mirroring the community it serves and moving smart energy forward.

Looking across the harbor from the Baltimore Museum of Industry, today’s new Exelon Building (under construction on right) dominates a skyline rapidly moving east from the old city. The tug is a sister ship of the old Company vessels that helped bring coal to generating plants.

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Five Pillars Based on Financial Responsibility

BGE’s guiding principles are five pillars, or business drivers, grounded on a supporting platform of financial responsibility. Some of the pillars were there from the beginning, some have changed shape and focus over time, and some embody modern concepts. Each has a history and is integral to the Company today.

• Safety • Reliability • Distinctive Customer Service • Diversity and Inclusion • Innovation and Efficiency Subsequent chapters explore the evolution of the BGE Pillars.

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Calvert Street, looking north from the Old Battle Monument

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A Platform of Financial Responsibility T H E BA SE O N W H IC H T H E F I V E P I L L A R S SI T From the beginning the Company’s challenge has been to provide a new and increasingly necessary service, charge a price that was perceived as fair, provide a return to expand the infrastructure, and pay a dividend to shareholders. Early bankers and businessmen had financial sense, but they had a lot to learn about the manufacture, storage, and delivery of “coal tar gas.� In the last half of the 19th century, competition from newly-chartered companies, both gas and electric, threatened financial stability for all. Gas wars produced ruin rather than customer choice. The Maryland Legislature froze gas prices, a strategy that did not produce fair competition. Electric power companies filled streets with overhead wires. In 1906 the merging of the Consolidated Gas Light Company of Baltimore and the Electric Light and Power Company into a monopoly achieved a level of financial stability not seen in the previous 100 years. The Maryland Public Service Commission (PSC), established in 1910, was responsible both for determining fair rates for customers and providing a fair profit margin. Consolidated finally had a stable platform. The financial stability of the Baltimore Gas and Electric Company continued steadily through the 1960s, challenged by environmental concerns and eventually electric deregulation. Environmental demands required cleaner generating plants, the development of nuclear power, and the enlistment of customers in energy savings plans. In 2000 deregulation separated the risk side of generation and commodity trading in Constellation from the more financially stable BGE side of transmission and delivery, though Constellation and BGE remained in the same corporate family. The financial crisis of 2008 did not leave Constellation unscathed as Berkshire Hathaway and, subsequently, the French company EDF rescued it from near bankruptcy. In contrast to the dangers on the commodity side, the long-term financial steadiness of BGE as a distributor made it a very attractive company. BGE remains fully responsible for its financial well-being, under the regulations of the Maryland PSC. It provides service to 100% of the population of Central Maryland, manages its rate structure, provides for long term investment in its aging infrastructure, repairs damage after major storms, and encourages its customers to reduce energy use. This financial balance has held steady, thanks to clear-sighted management and careful planning. After 200 years BGE remains financially secure, looking ahead to the opportunities in the future.

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Early financial documents. Clockwise from the left: first surviving stock certificate for the Gas Light Company of Baltimore, handwritten bills from 1834 and 1851. Note the charge for the meter rental in 1834. Investors and customers were the source of finances. Financial responsibility requires extensive infrastructure. A giant imported transformer (below) is headed for a substation at night through the streets of Baltimore.

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Safety Pillar 1

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Safety has been the highest priority throughout the Company’s long history. The Company has always acknowledged that gas and electricity are inherently hazardous products, able to cause injury, explosions and inadvertently energize equipment. Education takes two forms: a primary one to ensure the safety of all employees and the public and another to provide the customer with both information and products to use energy safely. Because gas and electric power grew from different histories and sources, safety practices were initially divergent, developing within each division according to specific needs and situations. Personal protection equipment could vary in different service regions, and regulations became more and more directive. The advent of the Calvert Cliffs Nuclear Power Plant in 1975 gave rise to new safety requirements set by the Nuclear Regulatory Commission. Other safety requirements came through the establishment of the Occupational Safety and Health Administration in 1971. Inherently hazardous energy inevitably contributed to accidents, leading to better equipment and more specific rules. Injury gave rise to the solutions. Those who had been injured or had seen their workmates injured had first-hand experience in developing more effective procedures. Firemen who shoveled coal into the gas manufacturing retorts in the early years had no protection against gas fumes. Linemen were always required to have gloves for handling electricity, and hardhats were required by the mid 1970s. The required goggles of the mid 1960s gave way to the more effective and comfortable safety glasses of the 1990s. Wearing safety equipment was often subject to the strictness of supervisors. By the 1990s uniform safety practices were mandated across the Company. Review procedures for all serious incidents were required and were designed to prevent further accidents. Educating customers to the proper use of gas was a slow process. Too frequently lighted candles were carried into dark rooms to investigate problems which could be catastrophic. Starting in the 1920s printed information encouraged purchase of appliances but lacked safety instructions. Today customers are encouraged to report gas leaks promptly and warned of impending storm damage through public media. Downed wires are always a potential danger after a storm. Programs to educate children are offered in schools, and the Company’s action hero, Captain Mercaptan, leads the way to help them identify and report the distinctive smell of a gas leak. Safety is and will always be the number one concern for an energy utility.


Safety is BGE’s top priority both for employees and customers. Clockwise photos: Chris Stokes (left) and Jon Manns, overhead mechanics, wear safety equipment for working on the lines. Trainee Brian Lee, an underground gas worker, is in full safety gear. In live gas situations he dons the mask he is holding. People are warned to keep clear from downed power lines. BGE’s own action hero, Captain Mercaptan, created with input from local schoolchildren, helps kids identify the distinctive gas smell and seek help.

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Reliability Pillar 2 Baltimore’s early history, both with gas and electric, was marked by incidents of unreliable energy delivery. Too many competing companies, uncertain sources of generation, dependency on stoking a coal furnace, human error, and patchwork infrastructure limited the consistency of delivery. Expectations were often low, and reliability meant producing adequate energy to meet needs. Generating enough power was the key to reliable service in the 19th and most of the 20th centuries. The dramatic spread of the infrastructure after 1950 began to shift the meaning of reliability. As 100% of the population became customers, marketing was broadened beyond only middle class residents. Serious natural disasters such as the massive snowstorm in 1958 dramatically underscored what was required to restore power quickly. Customers now had higher expectations for uninterrupted service. By 2000 reliability meant more than the speedy recovery from outages. As BGE no longer generates energy, it focuses on safety and prompt delivery to all customers. BGE’s increasing ability to manage energy delivery through storms is testimony to its resiliency, organization, communication systems, and dedicated employees. No longer does the Company wait to assess storm damage. Rather it relies on weather predictions to prepare in advance. Its digitized communications systems pinpoint outages, sending repair crews to the rescue. Customers are full participants in spotting outages, both large and small. The information provided to the call center helps BGE direct the repair work. Everyone wants to be back on line and everyone wants to be first. How today’s utility company responds to outages is a key measure of its reliability and quality of service. The number and duration of outages are measured with the goal of constant improvement. BGE aims to be the best in reliable service. After a serious storm, restoring full power as soon as possible demonstrates the pride of all BGE employees at their finest hour. Full mobilization in the face of a massive disruption shows community service at its highest level.

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Everyone expects consistent, reliable power. Early gas workers sought leaks by sniffing the streets. Today’s gas responders use censors to identify leaks and place warning signs. Storms bring trees down on wires, and linemen are on call to keep the energy moving.

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Distinctive customer service Pillar 3

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The initial struggle of the new Company was to develop technologies, manage financial structures, and sell the product. The City of Baltimore was the first customer, and without the contract to provide gaslight, there would have been no company. Although additional customers were the key to providing the funds for expansion, they were lucky to have consistency of service or attention to product repair. Once people discovered the benefits of energy the race was on. The proliferation of gas companies, followed soon after by electric companies, created chaos in the streets and a range of shady practices in the industry. If customers could be attached to existing gas mains, they could pay a lower rate, but the extension of new mains increased cost. Electric companies would link a new customer to a competitor’s service but still monitor the meter and send the bill. The key to expanding customer base, for both gas and electric, was the recognition that the first product was only light, which was not a 24 hour proposition. Companies needed customers to use the service in the daylight. A range of appliances received heavy promotion from Company salesmen. Soon everyone wanted a stove or an electric heater, and wanted them to work correctly. The courtesy behind distinctive customer service began to improve dramatically. After WWII the gas and electricity spread rapidly, and customers began to take their utility company for granted. It was no longer an exciting and unexpected novelty. Gas was always in the pipe; electricity was at the ready. Only the start of the environmental movement began to make connections between customer behavior and larger consequences. Frequently the major interactions with customers—lack of reliable service and cost—resulted in negative exchanges. A customer contacted the company only when things went wrong. The idea of the customer as a valued partner gained prominence with the advent of digital technology, a smart meter and a communication system that provide information on use and cost. The customer can now have positive interaction with BGE, see progress, save money, and conserve the environment. Just as innovative companies like Amazon and Uber raised the bar for on-demand service, customer satisfaction increased as a primary utility concern. New technologies are changing the utility-customer relationship. BGE has a strong community profile, a legacy of loyalty, and a distinctive level of service to all its customers. Energy is a public good, valued and needed by all. Reliable delivery, the maintenance and upgrading of the infrastructure, and realtime information about usage and cost are the keys to engaging with the public in a positive way.


True customer service began in the 1920s as workers pedaled off to service appliances, and sales ladies went door to door to sell them. Call centers began in the 1930s. Today they are critical to good service as they take calls from customers to identify outages and send out crews.

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Diversity and Inclusion Pillar 4

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BGE serves 100% of the population in its service area, a distinction that only an urban-based utility company can make. It cannot serve only the best, wealthiest, or most polite customers. It must deliver to all on an equitable basis. This 100% service has been true since the 1950s, when suburban growth brought gas and electricity throughout Central Maryland. For most of the 19th century and half of the 20th, residential electricity and gas customers were commercial or primarily middle class. The expanded reach of distinctive service to all gives BGE a unique mission: to mirror in its practices and its employees the customers it serves. Within BGE the values of diversity and inclusivity are the newest Company pillar. BGE had been looking at various methods of workforce development for several years as a way to move beyond an historic male and white company culture. Increased diversity, coupled with respect and understanding, have been shown to create a more productive, competitive, and inventive workforce than homogenous units. The question was how to make that idea work and bring it to fruition. In 2009, senior management adopted a “Lead, Coach, Manage” approach to diversity and inclusion. New ways to hire and train and expanded recruitment practices were instituted. Then Chief Executive Officer Ken DeFontes and Vice President David Vosvick were central movers, prepared to have key conversations with workers at all levels and to promote transformational education throughout the Company. The Focus 25 program, began in 2013, aims to expand the number of minority and women-owned business suppliers. Inclusion, the other half of the equation, addresses skillful management of an increasingly diverse workforce with the clear expectation that collaboration will be a hallmark of working at BGE. An inclusive work environment means each employee is openly valued, regardless of race, gender, sexual orientation, age, education, religion, personal interests, or appearance. Employees have diverse talents, backgrounds, personalities, and histories, and the Company needs all those resources to create a culture aligned with the community it serves. Each individual is recognized for what makes him or her unique and each has a responsibility within the Company to contribute to an inclusive culture. A Diversity and Inclusion Council, instituted under Constellation, was strengthened by the LCM initiative. Under the Exelon banner local chapters of “Employee Resource Groups” have begun, where workers with similar affinities share experiences. Hundreds of BGE employees now actively participate in these groups, through meetings, events, and volunteering in the community. The courtesy and engagement that employees show to each other are exactly the values projected to the customers.


The uniformed male servicemen in the 1920s reflect the lack of diversity among early employees. In the same decade, women entered the workforce, training to demonstrate gas appliances. The Company has records of African American workers as early as 1896; the linemen shown here date to the 1960s. The diversified work force has its first female line worker, Jessica Bauer, here with Marcus Ragsdale, being tested for self rescue by a 34-year veteran instructor, Gordon Johnson in 2016.

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Innovation and Efficiency Pillar 5 One of the most innovative leaders of the present generation, Steve Jobs, once said, “Innovation distinguishes between a leader and a follower.” Innovation is the key driver that has made BGE’s change, growth, and survival possible for two centuries. BGE prides itself on being a culture of innovation and increased efficiency as employees and leadership work together to develop new ways to do things. The advent of digital technology in the 1990s accelerated the pace of innovative change. The First Century Beginning with the introduction of gas light, utility pioneers developed new methods of manufacture, storage, and delivery of energy. Meters, wet and dry, measured usage and ultimately made it possible for smaller residential customers to have gas service. Spring Gardens became the flagship of large gas manufacturing plants in 1855. The arrival of electricity in 1881 created rival companies and new equipment. The Second Century The building of Westport in 1906, the first large coal-fired generation plant, anticipated increased demand for electricity. In 1949, the shift to natural gas began. The advent of Calvert Cliffs in 1975–7 marked a new step in generating nuclear energy. The coal-fired Brandon Shores plant which began operaion in 1984, reduced emissions with the most advanced technology of its time. Development of new forms of energy, particularly wind and solar, will again alter the playing field and give BGE new opportunities for distribution. The technological revolution and the deregulation of the energy industry in Maryland have brought the fastest changes, particularly in relation to delivering reliable energy to customers. Computers, mobile data terminals, in trucks give field service workers instant access to information. Automatic distribution provides remote control of field devices, including those on poles. Helicopters have become standard equipment, locating damaged sites and repairing transmission lines. Thermal imaging permits remote analysis of feeder connections, spotting trouble before outages occur. While the first call center for customers began in 1936, the internet has totally revolutionized communications with customers. Email, trade data, and tracking of usage connected to thermostats have increased efficiency and raised customer expectations. Customer connections, particularly calling in faults, allow field workers to identify problems more quickly. BGE’s most important recent innovation is the installation of smart meters. The development of the smart meter grid creates full communications with each customer. With this system, BGE is a national leader in interactions with all customers.

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Gas stoves, first offered for sale in 1887, reinvented the gas industry beyond lighting, and later the liquid natural gas works at Spring Gardens gave new life to the gas business. A few examples of the hundreds of innovations associated with BGE’s long history include the “feeder books,� the bibles of electricity for field workers for over a century, and the truck-borne computers that replaced them.

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Baltimore in 1816

A Bustling Seaport of 50,000 Fort McHenry

Fells Point

Jonestown

Jones Falls

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Inner Harbor Federal Hill

Baltimore

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Chapter 1

The Magic of Gaslight “. . . Those who have seen the ring beset with gems of light are sufficiently disposed to spread their reputation.”

— Rembrandt Peale in the American Commercial Daily Advertiser, June 13, 1816

In the spring of 1816, Rembrandt Peale was worried about the future of his new Baltimore museum. He had come to town during the War of 1812 determined to build an even better version of his father’s museum in Philadelphia. It was to be the first of its kind, a structure devoted entirely to fine arts and natural history. He wanted the bustling Baltimore seaport to enjoy “an elegant rendezvous for taste, curiosity and leisure.” Born during the American Revolution, Peale was part of a new generation that was promoting art and culture in the young U.S. Republic. He was the second son among many talented brothers and sisters. His engaging father, Charles Willson Peale, was one of the founders of American art and had painted almost 60 portraits of George Washington. Rembrandt, at 16 and showing serious talent, was able to paint the retiring first president from life, a special honor that he used to sell paintings for the rest of his long life. Now, at 38, Rembrandt was in the museum business and it wasn’t going well. His special new building on

In 1816, Rembrandt Peale invited an enthusiastic Baltimore to experience gaslight in his museum. He ushered in a new era of light and energy and gave birth to a new gaslight company, the first in America. (Illustration by Richard Schlecht)

An advertisement for the new Peale Museum illumination (Courtesy Maryland Historical Society)

Holliday Street, still standing today near City Hall, had gone way over budget. He had opened his museum just two months before the British attack on Baltimore in 1814. Objecting to war in general, he had avoided helping a successful star-spangled defense, hardly endearing him to the city fathers. Now, in 1816, his museum dedicated to taste and leisure, was not attracting much curiosity. In May, word arrived from Rembrandt’s father and brother Rubens that the illumination of their Philadelphia museum using gas light was filling the galleries with swarms of amazed visitors. It was the spark that could quickly turn around the Peale investment in Baltimore. Rubens had been fascinated with gas lighting for years. The Philadelphia city council had threatened him with arrest for generating noxious odors in his neighborhood.

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The Blessed Effects of Gaslight City streets had always been dark and dangerous. The inventive Ben Franklin suggested flat glass panes and a large funnel that kept streetlights clean and burning all night. Plans in several cities called for every homeowner to put a lantern out at night. The problem had existed, however, for thousands of years. Tallow, pitch, and oil smelled, smoked, flamed out too quickly, and could not provide enough light to conquer the dark of night. Coal had been providing heat for centuries. Miners knew about the dangers of burning coal gas they called “choke and fire damp.” In the 1790s, an Englishman, William Murdoch, first used coal gas to light his house in Cornwall and then James Watt’s steam engine factory in Birmingham. Experiments continued in England, France, and Germany. In 1807, a public demonstration of gas streetlights caused quite a stir in Pall Mall, London. By 1812, politicians realized that the streets would be much safer with brighter streetlights. Parliament chartered the first company in the world, the London and Westminster Gas Light and Coke Company, in 1812. Within a year, Londoners were gawking at a string of gaslights across Westminster Bridge. For the first

time in history, human ingenuity was finding ways to place light where darkness had always prevailed. Americans were not far behind. Baltimore had put up a large public oil lamp in the center of the Baltimore and Howard intersection to guide vendors and customers to the market house. A self-styled “philosophical exhibitor” named Benjamin Henfrey next proposed gas lit light houses with reflectors to “extend the rays of light” over a large area. Baltimore didn’t buy the idea but Henfrey took it to Richmond in 1802 and briefly lit up some streets there. The challenge remained daunting. How could a company reliably generate and distribute enough energy to light a city? The new Gaslight Company of Baltimore was the first chartered in America to take on that challenge.

Londoners inspected new gas streetlights in 1807. James Peale, Rembrandt’s uncle, demonstrated that whale oil lamps made light in the night a solitary experience. (Courtesy Detroit Institute of Arts/ Bridgeman Images)

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A 1921 painting dramatized the moment when Rembrandt Peale ignited his “gems of light”.

Early in 1816, the Peales found Dr. Benjamin Kugler of Philadelphia who brought the latest successful “Practical Treatise on Gaslight” from England. By May, they were lighting a museum gallery with “Carburetted Hydrogen Gas” generated from tar. Philadelphia was enthralled. The Peale family sent a $5000 Kugler patent with Dr. Kugler to brother Rembrandt. On June 11, 1816, the Peale Museum introduced Baltimore to the history-making magic of gaslight. For a few pennies, visitors flocked to an upstairs art gallery to gawk at the burning ring with 100 “gems of light.” On June 13, an announcement in the American Commercial Daily Advertiser, promised revolutionary lighting “Without Oil, Tallow, Wick or Smoke . . . .” The museum promised that it “will be illuminated every evening until the public curiosity be gratified.” That curiosity, finding energy to illuminate the

Rembrandt Peale (1778–1860), here in an 1828 self portrait, introduced gaslight to Baltimore in 1816. (Courtesy Detroit Institute of Arts, USAFounders Society purchase and Dexter M. Ferry, Jr. Fund/Bridgeman Images)

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The Amazing Peale Family “It has been said , and generally is an adopted opinion that genius for the fine arts, is a particular gift and not am acquirement. That Poets, Painters &c are born such.”

— Charles Willson Peale (1741–1827)

Rembrandt Peale, a founder of the Gas Light Company of Baltimore, had quite a pedigree. From humble beginnings as a saddler in Maryland, his father, Charles Willson, became a driving force in the creation of American art and science. It was said that he was “interested in everything,” As a renowned portrait artist and George Washington’s favorite painter over many decades, the endlessly curious Mr. Peale also jumped into natural history with taxidermy, horticulture, paleontology, and museum exhibitions. He was a great natural talent and showman, passing on his abilities to two more generations. The Peale clan literally chronicled the shakers and movers of early America. Unfortunately, business acumen was never a strong point for the family. They struggled to make a living at their appointed tasks. Museums with portraits of heroes, stuffed animals, and mastodon skeletons were still a new concept in America. When he introduced gaslight to his Philadelphia museum, Charles Willson wrote an enthusiastic letter to his daughter Angelica claiming that his museum would now “be the admiration of the world.” He also predicted that Rembrandt would “make himself perfectly master of all the best modes of producing these [gas] lights and very probably will do essential service to the publick of Baltimore.” Rembrandt did do essential service by creating what became the Baltimore Gas and Electric Company. He was, however, vain, self indulgent, and long on ideas but short on follow through. With mounting debts and disagreements, he sold the museum to brother Rubens in 1822 and fled to Italy. Upon his return, he was filled with complaints, writing to a friend, “It is not to the credit of Baltimore that the literal views and purposes of science should be sacrificed to the sordid calculations of shortsighted commercial avarice.”

Charles Willson Peale sought more light to show off his innovative Philadelphia Museum. (Pennsylvania Academy of the Fine Arts, Philadelphia. Gift of Mrs. Sarah Harrison [The Joseph

Harrison, Jr. Collection]) Peale’s letter to his daughter Angelica

described the new system of gaslight. (Courtesy American

Philosophical Society)

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dark of night, has continued and accelerated over 200 years. Local politicians and officials joined the enthusiastic throngs. Within days, Rembrandt Peale was selling another idea. Why not light the dark and dangerous nights in Baltimore with gas streetlights? Peale’s idea had a new twist. How about forming a new company to generate gas that would be distributed throughout a growing Baltimore? Everyone would benefit, from investors to every citizen looking for safe routes through the night. Peale quickly found some influential partners. Robert Carey Long, the pioneering architect who designed the Peale Museum, stepped up. He was followed by William Gwynn, an Irish immigrant who edited the Federal Gazette, Colonel James Mosher, a Revolutionary War veteran who was on the Baltimore City Council, and William Lorman, a wealthy merchant who owned ships and stagecoaches. On June 17, Peale and his investors presented their idea to the City Council. Led by Mayor Edward Johnson the council voiced its enthusiastic support. The Gas Light Company of Baltimore was chartered to “provide for the more effectually lighting [of] the streets, squares, lanes, and alleys of the City of Baltimore.”

Replicas of the early gas streetlights were placed at the Peale Museum in 1950. A computer re-creation of the original gas revolution on Holliday Street shows the Peale Museum, the Holliday Street Theatre and the first street lamp lighting up the neighborhood. (Visualizing 1816 Baltimore. Imaging Research Center, University of Maryland Baltimore County)

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Chapter 2

The Gas Light Company of Baltimore Grows Slowly 1816–1861 “The Company will agree to furnish gas for the public lamps in this city on as favorable terms as is furnished in any city in the United States. . . .”

— Columbus O’Donnell, President, Gas Light Company of Baltimore

This bell, now in a place of honor at Spring Gardens, is the oldest surviving artifact of the Baltimore Gas Light Company. Cast in the 1840s by the W. Peters Company it sat outside the Holliday Street retort where it signaled the beginning and end of the workday. Note the image of George Washington on the bell, probably inspired by Baltimore’s Washington Monument.

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Once the Baltimore public realized that gaslight made dark streets safer and lit houses as never before, there were growing opportunities for the new business. Gas could be poisonous and explosive, but it was so much better than whale oil lamps and candles. One local citizen complained in the Baltimore Patriot newspaper that the disagreeable odor around the gas streetlights was undoubtedly a “bane to human life.” Company directors had no understanding of gas manufacture, and there were few in America who could help them. They did know how to sell company shares and slowly turned a small profit, but it took decades to build gas manufacturing plants, lay miles of pipes, and serve more than a few customers. For almost 50 years, there was only one gas company and it had only one long term customer—gaslight for the City of Baltimore. More customers were needed to give the new Gas Light Company of Baltimore adequate income to lay new pipe. The number of those subscribing to the new service was seriously limited by cost, as only major establishments, such as theaters, churches, stores, community halls, and government offices, could afford gas lighting. The monthly cost was well out of reach of ordinary workers. A rare early glimpse of the new company is preserved in the mayor’s correspondence. In 1823, two workmen, Michael Brannan and Peter McEwing, were given what amounted to an early speeding ticket for trotting their horses too quickly through the streets. One of the Gas

The new gaslight company used wooden pipes to distribute gas under low pressure to streetlights. The elegant new lights slowly became a fixture on Baltimore streets and remained in service until the 1950s.

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The earliest photograph, ca. 1850, of Baltimore’s Inner Harbor features steamboats, wharves across the water on Pratt Street, and a skyline dominated by the Catholic Basilica and the Washington Monument. (Courtesy Maryland Historical Society)

Light Company founders, James Mosher, wrote the mayor to get relief for the workers paying the fine. “These men do a great deal of hauling for me at the Gas factory and I do assure you, sir, that they are as industrious, sober and honest men as I have ever met with.” There is no evidence that Mr. Mosher’s plea was successful. Banker William Lorman guided efforts during the first difficult 16 years, but it was General Columbus O’Donnell, another banker very active in the City’s business, who led the Company successfully for almost 40 years, increasing its profits fortyfold. Realizing that the gaslight endeavor needed more funds to grow and prosper, O’Donnell introduced meters in 1834. Prior to

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that, gas bills were based on the size of the ring with no way to measure usage. Subscribers were alarmed that the new meters would give the Company oversight as to how much they used. Gas, as a commodity, was becoming a necessity. A bill was introduced into the Baltimore City Council that banned such meters. Meters, of course, won out and eventually the fairness of the charging process was accepted. Two key trends emerged from this early contention. The government was seen as the only force to control profit-taking by a utility, a role it would continue to play. The general public was uneasy that a growing monopoly would take advantage of eager customers.


An 1850s snapshot of a quiet moment on Baltimore Street highlights the public market fountain in the foreground and two gas streetlights nearby. (Courtesy Maryland Historical Society)

A sketch of the new pre-Civil War gas generating plant at Spring Gardens demonstrates the Gas Light Company of Baltimore’s investment in becoming the largest gas manufacturer in the United States.

In 1838, an editorial in the newly launched Baltimore Sun, laid out the complexity of the problem. Gas, the newspaper said, was generally used but derived in very special ways. The paper wanted to provide the correct conclusions to “the propriety of [the people] remaining at the mercy of a single company.” The editorial asked what capital the Company needed to provide gas; what taxes were levied for gas in the

street lamps; and if the gas furnished was as clean and as cheap as in other cities. If the gas was dirty, were more visits required to the street lamp, thus increasing the public cost? “Are our citizens compelled to pay at the time for the same quantity of gas, one-third more than they had to pay several years ago?” Most importantly, “Is there any provision in the charter of the Baltimore Gas Company which presents an insuperable objection

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to the starting of another gas company to create a reasonable competition?” Competition in the public view was the antidote to monopoly. The established Gas Light Company, however, repeatedly proclaimed that chaos, both physical and financial, would result if competing new companies entered the business. In spite of persistent public concerns, without competition the Gas Light Company grew in downtown Baltimore and turned a handsome profit for its investors by the 1850s. A new Holliday Street generating plant

was quickly abandoned as the company invested in a much larger plant at Spring Gardens where coal gas was produced. On the eve of the Civil War, the now 44-yearold monopoly would face its first serious competition.

The expanding Spring Gardens gas plant was fed by Baltimore & Ohio “Camelback” locomotives hauling loads of coal from western Virginia in pot hopper cars. (Illustration by Richard Schlecht)

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Chapter 3

Civil War and Competition 1861–1880 “Rival companies would each make good gas and strive to outvie each other in the matter of quality at least.”

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— Editorial, Baltimore American, Editorial, February 4, 1860


The Civil War swept over the country and Baltimore, a town of divided loyalties, spent the war occupied by Union troops. The coal and the gas it produced were expensive and in short supply as the Baltimiore & Ohio Railroad transported troops and supplies for the Union army instead of coal for the retorts. Customers to the east of the Jones Falls finally received gas in 1854. They had complained regularly that they paid taxes to support the Gas Light Company but were left in darkness. After the war, new competition arrived from two newly-chartered companies.

Civil War Union cannons on Federal Hill are aimed at a rebellious Baltimore. Despite Union army occupation throughout the war, the city was relatively secure and prosperous. Coal remained scarce as long as the military needed the railroads. (Courtesy Maryland Historical Society)

A rare pre-Civil War photograph taken at the Baltimore & Ohio Martinsburg, Virginia roundhouse shows locomotives and pot hopper cars carrying coal destined for Baltimore. (Courtesy B&O Railroad Museum)

By 1861, the Maryland General Assembly addressed the concern over a gas monopoly that delivered poor service and chartered a new company, the Peoples Gas Light Company. As the first serious competitor, Peoples struggled to find the capital to build generating plants. As Baltimore grew, gas prices plummeted, but the race for distribution lines tore up the streets. In 1869, the officers of the Gas Light Company of Baltimore wrote publically to the mayor and City Council of Baltimore, describing the effect competition was having on their service of street lighting. Competition would raise rates rather than lower them, as their company could no

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longer offer discount prices to the City. Only if the new company ran the whole service would order reign. The officers even suggested that gas, like water, police, and fire, should be a public function of the people. They offered to sell the gas plants and the existing pipes to the City for a “reasonable price.” The City declined to run the gas works for fear of increasing public expense. Philadelphia had attempted public management and the resulting service was extremely poor.

“We are aware that much dissatisfaction is felt toward all gas companies and that will always be the case where private corporations supply the public with an article which has become a necessity to all. “

— Officers of The Gaslight Company, 1869

Public “dissatisfaction” with one company controlling a “necessity” and the economic ruin and public chaos created by competition are present throughout the mid 19th-century. Daniel Hobbs, a Civil War-era meter setter without benefit of a horse, a wagon, or a wheelbarrow, trudged out daily with his load of meters to basements in downtown Baltimore. He returned to the shop each evening with yet another load in need of service.

Annoying disruptions caused by streets being torn up to lay gas lines grew with increased competition after the Civil War.

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At one point in the early 1870s, a Brooklyn financier, Seymour Husted, offered $3 million to purchase the Gas Light Company. His bid was too attractive to turn down so, while chaotic competition continued through the 1870s, the management was split between Baltimore and Brooklyn. The Consumers Mutual Gas Light Power Company was founded in 1876 to promote the new cheaper and more efficient “water gas” technology. It was a strong competitor and there was an effort to divide up the streets so that the growing Peoples Company could have west Baltimore, leaving the center city to the original Baltimiore Gas Light, often competing in its own territory with Consumers. Competition grew and consumers always hoped for better prices and service. Advertisements for Consumers Mutual Company concluded that “legitimate competition is healthy and


a way to insure to consumers fair prices, but excessive competition is seen as spasmodic and destructive…and always leads to annihilation of one of the contestants, to consequent extreme rates.” Companies openly laid pipes in the same streets, some went bankrupt, some submitted to merger, some embraced merger as they profited when their smaller company joined a larger one. The public demanded less confusion, and competition finally led to a civic peace. By 1880, following a ruinous price war, the three competing companies realized that only a complete merger would work. Lengthy negotiations began, and the stockholders of the Peoples Gas Light Company, the Consumers Gas Light Company and the Gas Light Company of Baltimore, agreed to form The Consolidated Gas Company of Baltimore City. This consolidation did not resolve all the issues. The gas business was on an upswing. By 1881 there were

more than 670 gas companies throughout the United States. In Baltimore, another gas war had two new companies offering lower prices to customers located on a main line with Consolidated. It meant higher prices to those who had no choices. Impassable streets and fluctuating prices again roused public ire. In 1887 the Legislature passed a fixed gas price of $1.80 per 1000 cubic feet of gas. This first formal attempt at public regulation produced much confusion and unhappiness as a marketable commodity was restrained by a fixed price. It would not be the last time that the State Legislature engaged in price fixing for a utility. In 1888, with electricity looming, Consolidated merged with two new upstarts, the Equitable and Chesapeake companies. The result, after almost three decades of rivalry and confusion, was a single gas company for the region.

From Balloons to Water Gas Thaddeus Sobieski Constantine Lowe (1832–1913) was an

inventive, self-taught scientist, and aeronaut. While still a teenager, he was already recognized for his knowledge of meteorology and dreamed of riding a balloon across the

Atlantic. When the Civil War began, Lowe sold President Lincoln on using hydrogen-filled balloons for aerial reconnaissance and joined the Union army in 1862 as America’s first chief

aeronaut. After the war, he invented a water gas process that produced abundant hydrogen gas with steam and charcoal. He helped form the Baltimore Consumers Mutual Gas Light

Power Company with his process in 1876 and revolutionized the generation of gas. Later, Lowe moved to California where he built a popluar excursion railroad near Los Angeles.

Professor Lowe, the Civil War’s lone aeronaut, took his cumbersome balloons and hydrogen-generating wagons to the 1862 Virginia Peninsular Campaign. He was a prime target whenever he ascended to observe the Confederate positions as the Union army advanced toward Richmond. (Courtesy Library of Congress)

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Chapter 4

Electricity Brings More Competition and Consolidation Wins the Day 1881–1906 “A new sort of urban star now shines out nightly, horrible, unearthly, obnoxious to the human eye. . . . To look at it only once is to fall in love with gas. . . .”

— Robert Louis Stevenson, 1881

This photo, taken at Calvert and Redwood Streets, speaks for itself. Competing poles and wires were not only ugly and messy, they were dangerous.

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The Consolidated Company soon found itself with a new form of competition. In 1881, the Brush Electric Company introduced electricity to Baltimore. Another banker, Summerfield Baldwin, led the company. It immediately bid to provide street lighting and, between 1882 and 1895, substituted 275 gas lights with the brighter and more powerful electric lights. Because electricity was much easier to produce than gas, a tangle of small electric companies, all locally based, delivered their product through a maze of poles and wires. The confusion of wires proved hazardous when hastily rigged lines fell on unwary citizens and horses. From the beginning, there were national players in the mix, including Thomas Edison and George Westinghouse. Brush suffered a devastating fire in its plant, and a serious competitor, the Edison Electric Illuminating Company of Baltimore was formed in 1895. The production and delivery of electricity also attracted financial support from both New York banks and talented entrepreneurs. S. Davies Warfield, uncle of Wallis Warfield Simpson, formed the Continental Trust Company and began to buy major stock in Brush, now the


United Electric Light and Power. Once Warfield controlled the primary electric company, he acquired stock positions in the Consolidated Gas Company and brought it under control of Continental Trust. His conviction was that only a large and unified company providing more than one form of energy would best serve the public. Warfield planned to build Westport, a single large generating plant, certain that the economies of scale would bring more efficient order. The major gas holders at Spring Gardens, built in 1902, 1904, and 1910, were also part of the expansion plan. From that platform, Warfield was able to purchase controlling stock in the Edison Company. Essentially, a smart banker had formed a holding company for all three entities. The final complete merger of gas and electricity in Baltimore was accomplished, without acrimony, by the bankers and stockbrokers in 1906. After almost a century of confusion and sometimes chaos, the marketplace had spoken. The Consolidated Gas Electric Light and Power Company was now a complete and unified monopoly, approved by the Maryland General Assembly and ready to show the efficiency of size. The

Thomas Edison (1847–1931) was one of the great inventive geniuses of American history. His patented incandescent light bulb and his participation in the new electric industry changed Baltimore and every corner of the nation. The gas industry had to invent new uses to compete. Laborers in derby hats laying cable underground and stringing lines overhead were a common sight in turn of the 20th-century Baltimore.

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Left: Influential financier S. Davies Warfield (1859–1927) used his considerable financial and bargaining skills to merge competing industries and create the Consolidated Gas Electric Light and Power Company in 1906. Consolidated and BG&E would control Central Maryland’s utility as a regulated monopoly for most of the 20th century. Right: George Beadenkopf was an essential engineer in the Baltimore gas business for almost 50 years. After the 1904 Great Fire, he won special recognition for unifying the gas lines and mains. When Beadenkopf died in 1923, all of Consolidated went into mourning.

After a slump while competing with electricity, the gas business came back selling appliances. By the early 1900s, Spring Gardens was again expanding with new giant gas holders that dominated the Baltimore skyline until the 1990s. Here workers construct the foundation of a 220-foot holder.

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S. Davies Warfield and the Consolidated Company pushed to invest in large scale electric generating technology. The new Westport plant, across the water from Spring Gardens, featured state-of-the-art turbines and 200 foot smoke stacks.

recognizable parent of today’s BGE was born after almost 100 years of entrepreneurship, technological advances, bankruptcies, and mergers. It was final recognition that a single fully integrated company would best deliver energy to the Baltimore public. A single powerful company again ignited the general “dissatisfaction” about a monopoly. The State Legislature and City Council seemed to be the only avenues for the public to create a brake on the situation. From 1906 to 1910, several propositions were put forward to regulate the utility. At first, Consolidated opposed the formation of a regulatory committee. On the other side, small companies vied to be allowed to compete for utility customers. With a century of experience, Baltimore saw where that led. Consolidated, born with the commanding presence of businessman S. Davies Warfield, was trying to sell the community on cheaper natural gas imported from West Virginia. Maryland Governor Austin Crothers finally addressed the ongoing controversy over a new energy source touted by a new monopoly. He followed examples

set by Wisconsin and New York, took some political risks, and pushed through reforms in 1910 that included a Public Service Commission. The Maryland Legislature created the Public Service Commission to “investigate conduct and set rates, regulating energy, telephone, transportation and other vital services.” Once the Commission was agreed upon, Consolidated began to cooperate with the Commission, seeing it as a responsible partner in the delivery of energy. This early response to governmental regulation began a long history of working cooperatively within the regulatory process. Over the next 20 years, more than 20 smaller locallybased electric companies were absorbed by Consolidated. Its larger infrastructure, its ability to sell appliances, and its more effective response to emergencies made it the kingpin. Companies based in Westminster, Annapolis, Patapsco, Roland Park, Catonsville, Baltimore County, Bel Air, and Havre de Grace were also absorbed, creating a regulated utility and vertically integrated Consolidated.

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This busy scene on a Baltimore street in the 1880s demonstrates how the new electric industry was taking over the downtown landscape. Hard working teams were competing to put up electric lines and poles and the City was soon a tangle of power lines that were both ugly and dangerous to the people walking and riding below. (Illustration by Richard Schlecht)

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Meters: Challenging Inventions

Gas was originally sold at a flat rate based on the size of the iron ring of flame. As a customer, you were expected to turn

it off during the daylight, but not everyone did. “Wet meters” used in England in 1817, could measure actual usage, but installation in Baltimore did not begin until 1834.

A hullabaloo ensued. Surely the gas provider wanted to

find a way to monitor customers, to charge them extra. Bills

were introduced in the Baltimore City Council to prohibit these new meters, and suspicion about the controlling power of a large company filled the newspaper columns.

Meter reader ca. 1970

Slowly it was perceived that gas meters actually

promoted a fair operation. You only had to pay for what you used. They were not a scheme to increase rates, but, in fact,

they made it possible for ordinary citizens to afford gaslight at home. They also increased the Company’s customer base.

“Wet meters,” placed outside the residences, required

monitoring. The water inside had to be topped up. In winter, the meters were subject to freezing, so residents had to top them up with whiskey. The spirits were only sold by the Gas

Light Company and were sometimes “sampled” by the meter

men. The iconic figure of the meter man delivering, retrieving, and servicing meters became part of BGE lore.

Electric meters were introduced in 1889, eight years

after electricity became a commodity. Like the gas meters 50 years earlier, the new devices produced widespread public Dry Gas Meter

opposition. These early meters probably merited their bad

press. Inside each meter was a metal plate. Electrical current passing through the meter delivered a thin film of silver on

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In 2016, smart meters face much the same opposition as

the earlier devices. With the approval of the Maryland Public Service Commission BGE has installed them in residences,

using its smart grid system to create a two-way system of communication, critical to providing information to the customer about usage and to the Company about grid

performance and outages. BGE was one of the first utilities in the country to move to smart meters.

The introduction of smart meters triggered suspicion

among a small number of customers, including claims of

privacy violation. There were some fears that radio waves emanating from the meter would contribute to various

medical conditions. Despite evidence that the radio waves offered no greater danger than those emitted by a garage door opener, the concern remained among some groups.

BGE offered customers an option not to have a smart meter installed in the home. As a utility company serving all the community, BGE has learned to accept that a consistent segment of the public will be concerned about new technology.

Over the past 200 years, the invention and installation

of new devices that measure how much energy a customer Pay-as-you-go Electric Meter

uses have initially raised opposition. Despite the evidence that all three meters have consistently lowered residential costs, meters have raised fears that a utility can control customer

the plate. To assess usage, the meter man removed the plate,

behavior and increase rates. In the long run, however, the

usage. The opportunities for mixing and dropping plates often

and provided customers, as partners, an increasing degree of

carried it into the company office, weighed it, and calculated

meters have proven the wisdom of accurate measurement

created deplorable chaos.

control over what they use.

The situation was made worse because there were

multiple electric companies competing for customers. Some measured usage by ampere-hours, some by kilowatt-hours.

Rates differed between companies and were not determined by what it cost to supply electricity but by the competitive

situation. Some companies promised flat rates if you switched

suppliers, and some residents tried to cut deals for flat rates by threatening to switch.

Some companies simply took the money from the

customers and connected them to a competitor’s wires. Price

wars designed to lure new customers only succeeded in raising rates. Newspapers again carried editorials filled with suspicion about the power of these companies to control what was now a necessity. Slowly the notion that meters actually promoted

fairness took hold, but it was not until the end of the century that flat rate charging finally ceased.

Smart Meter

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Chapter 5

Financial Responsibility “The Gaslight is managed by a company of patriotic gentlemen who we hope will derive both honor and profit as a fit reward for their public spirit and that it will be an ornament to our growing City.“ — American Commercial Daily Advertiser, September 17, 1816

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These historic trucks bear testimony to the investment the Company has made in building its infrastructure, both gas and electric. Trucks made it possible to expand construction and maintenance to a growing service area.

Throughout its many incarnations BGE/Consolidated Gas Electric Light and Power Company/Peoples Gas Company/ The Brush Electric Company has been led by individuals of financial acumen who managed to make solid business decisions under radically changing circumstances. They could oversee the actual process of building a spreading infrastructure and manage the finances and labor force behind it. The original company, the Gas Light Company of Baltimore, sold stock to those who heralded the arrival of gaslight on Baltimore’s streets and hoped for a good investment. The challenge, for the first time, was to manufacture, deliver, and manage coal tar gas. It was 10 years before stockholders received even a small dividend. With limited miles of mostly wooden pipe infrastructure,

few customers received gaslight. There was, however, no serious competition for gas until after the Civil War, a circumstance that helped to create a stable market. Electric companies were chartered to provide service in various City districts. They were led by individuals who had vision about the industry. Some were after a quick buck. The unification of electric companies occurred because the larger and better run companies could buy out the smaller. The wisdom of a single delivery company eventually took hold. In 1906, bankers bought enough of both gas and electric stock to form Consolidated Gas Electric Light and Power Company, the single lineal parent of BGE. Within weeks of the consolidation, Westport, a large electric generating plant that could serve all of Baltimore, was online. Overall, vertical control of the

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utility created solid financial responsibility. The result was a steady increase in investment and the development and maintenance of the growing infrastructure. Post World War II was a boom time in the utility business. The expanding suburbs around Baltimore created an increasing supply of customers who were more than happy to purchase electric appliances. The number of customers grew from 405,655 in 1950 to 687,038 in 1970 and sales during that period increased more than 450%. The cost of energy was relatively stable, hovering around 2 cents per kilowatt hour.

The cost of energy, influenced by the oil crisis of the 1970s and by environmental concerns, more than tripled by 1985. Income slowed and the increased costs of energy as a commodity put BGE into a less stable financial position. Several outside ventures were developed under a new holding company, Constellation Energy. The new company sold excess energy on the market, built a power plant in Hawaii, and created real estate and retirement community ventures. As deviations from BGE’s primary mission, some of the investments proved to be less than successful and were ultimately abandoned.

The chart shows historic electric trends that have shaped BGE’s financial positions. The cost of electricity (blue rate line) started high in 1910, but dropped and remained remarkably stable from 1915 to 1970, when it rose sharply. The financial stability of BG&E was steady until 1970 when an oil crisis and environmental concerns created a sharp increase. Customer growth (purple shading) has been remarkably steady but starts to level off into a no-growth position in 2010. Electricity sales (green) rose steadily after 1950 and peaked in 2000 despite a fluctuation in rates. Rates went down from 2000 to 2007 but increased sharply as the PSCmandated rate freeze was taken off. From 2010 onward, both sales and cost dropped, with sales dipping sharply. Customers now and in the foreseeable future are using less energy and paying less. BGE balances the decreased use and income with increased efficiency.

As the Company moved toward electric deregulation, it faced its most complex financial situation. The Maryland PSC rulings on deregulation required BGE to spin off its generation plants and become solely a delivery company. Constellation became the parent company and BGE common stock was no longer publicly traded but was subsumed under Constellation stock. BGE’s area of financial activity became circumscribed but stable. It managed only the delivery of a commodity through a massive, if aging, infrastructure. From the customers’ point of view, however, BGE was still the face of Central Maryland’s energy company although it no longer had the risks of commodity trading. For much of the 20th century, BGE relied on leaders who were engineers and came primarily out of the gas business. By the end of the 1990s, the arrival of deregulation demanded complex financial planning, the ability to manage an energy product on the open

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A brand new bucket truck illustrates the continued investment that BGE makes in its infrastructure. Ongoing maintenance and repair protect the financial stability of BGE.

market, and the skills to shepherd the company on a highly competitive national playing field. Leadership of the Company required financial as well as technical and engineering skills. Constellation turned to Wall Street and Goldman Sachs to obtain the financial market skills in a new arena of energy commodity trading. One of the consequences of electric deregulation and the Maryland PSC rulings was an agreement that BGE’s rates would be frozen for seven years for residential customers. The expectation was that rates would remain stable for that period, an expectation far from realistic. Power prices rose significantly and Hurricane Katrina put additional pressures on the energy market. When the seven years were over, BGE found itself in the position of asking its customers for a 72% increase to maintain financial stability during that period. The greatest challenge to financial stability came with the 2008 financial crisis. Constellation, BGE’s parent, found itself in an over-leveraged position, putting itself and its stock at the risk of bankruptcy. Berkshire Hathaway and Warren Buffett and the French company EDF rescued Constellation for a four month period, saving it from the brink of financial collapse. Constellation and BGE found a financial footing and bought the Company

back from Buffett. Compared to the high-profit risks associated with commodity trading, the steady service and community-centered financial activity of BGE began to look extremely attractive. The 2012 merger with the Exelon Corporation, an experienced company with a stable of utilities, market trading companies, and energy generation, brought back a vertically integrated company with a regulated utility embedded in it. As a delivery company in the 21st century, BGE finds itself with a very different financial platform from its 20th-century model. While its profit margin continues to be set by regulation, currently 9.7%, BGE must maintain its complex infrastructure, initiate new delivery technologies, prepare for natural disasters, and purchase energy on the open market for delivery. BGE undertook serious re-investment in the electric grid and gas distribution system and an aggressive approach to efficiency. Near-zero customer growth combined with substantial investment, has pushed the company into frequent rate cases. Financial responsibility can no longer be based on continued expansion; efficiency, conservation, and customer service have become the basis of financial stability for a Company centered on transmission and delivery.

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Chapter 6

Consolidated – Through Two World Wars 1906–1945 “The use of gas today occupies a more and more prominent place in the domestic and industrial life of the community.” — J. E. Aldred, Chairman of the Board, Consolidated , 1916

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In 1916, Consolidated was celebrating 100 years of gas service to the Baltimore community. A festive four-milelong June parade, featuring 2500 employees, 200 horses, dozens of new-fangled automobiles, and 52 elaborate floats, brought the City to a standstill. The impressive 29-story headquarters still going up on Liberty and Lexington was a constant reminder of how important the company had become during the City’s previous century. With all the proud images of its humble and sometimes chaotic beginnings, the Consolidated Gas Electric Light and Power Company was a modern milliondollar mainstay in Central Maryland. All the competition and confusion of past decades faded as continuing mergers united the region’s small, independent energy producers. Consolidated proudly celebrated the 100th anniversary of gas with a large parade through downtown Baltimore. Here, a horse-drawn float carries employees’ homemade replicas of the Peale Museum and the new G&E building.

The horse-drawn pump wagon is about to yield to a new truck, the best way to get the work done. The presence of gas holders indicates serious gas manufacturing.

Gas was still a sentimental company favorite, but, by 1916, electricity was becoming the bigger end of the business. With the new, progressive leadership of J. E. Aldred and Herbert Wagner, Consolidated merged the management of its two contrasting cultures, gas and electric. Aldred brought in his expertise, clean hydroelectric power imported from the Susquehanna River in Pennsylvania. It replaced the burning of over a million tons of “Black Mine” coal in six years. The three 220-foot high by 220-foot wide gas holders at Spring Gardens, along with 200-foot high towers at Westport, dominated the south skyline of Baltimore. The Baltimore & Ohio Railroad doubled its purchase of Company power, and Baltimore City started pumping all of its water with locally produced electricity. Gas lines stretched over 1600 miles under Baltimore but the chief product was still largely providing light

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The G&E Building has dominated the central city for a century.

at night. The gas division was at a disadvantage in competing with more versatile electricity. To expand, Consolidated sold gas to local companies making steel, smelting copper, roasting coffee, ironing new clothes, molding bottles, and decorating tin ware. Once the idea that gas could heat homes and cook food took hold, gas had a new life. The growing Company was paying more attention to its over 160,000 customers now stretching out from center city more than six miles in all directions. President Wagner addressed public relations with the comment

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that “the one thing…to bring about and maintain good public relations is…confidence of the people that the rates charged are just and fair.” Fair rates were enough to maintain good customer relations. Consolidated invited customers and employees to invest personally in stock, the first time employees had been so invited. The progress of Consolidated was constantly upward. Internally, the Company was well managed, cared for its employees, and made money. The difficulties in this period were external, shaped by international conflict and economics. As the United States drifted into a


terrible world war in Europe, mobilization created new and pressing demands for energy. In June 1917, a Defense Parade featured the public utilities division with many young men marching to enlist. The Company also joined the country in promoting war bonds to fund a high energy defense program. With transportation dedicated to the war effort, coal became scarce. At one point, the Westport Station had only 300 tons of coal available, enough to keep the

boilers going for three hours. At Baltimore’s sprawling Bethlehem Steel Plant, new coke ovens filled the gap by supplying dirty gas on a hastily built underwater pipeline to Spring Gardens where it was purified. Energy challenges were made even worse in 1917 by the coldest December in everyone’s memory. Up to 12,000 homes in Baltimore were unable to get coal for their furnaces to fend off the bitter weather. In 1919 Consolidated sought rate increases from the Public Service Commission and received permission to adjust its own rates without protracted hearings. While most markets grew slowly, a Baltimore building boom stretched the City to almost 60 square miles. There also were greater demands locally for energy to produce brass, steel, and copper. Looking for new markets, Consolidated grew its electric and gas appliance divisions. Middle class city residents were abandoning expensive servants for washing machines, vacuum cleaners, and irons. Owners put electric wiring in old homes. Attractive showrooms

A proud Mr. Gas Man is featured in the 1916 centenary parade.

Less than a year after the centenary, Consolidated employees were proudly marching to join the military during WWI.

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Horse-drawn sleighs gather in a 1922 snowstorm, ready to restore power in neighborhoods.

Expanding service required laying gas pipes over and under waterways. Here, barges and cranes ready pipes for placement.

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graced the lower floors of the Company headquarters, and a growing force of male and female employees stood ready to sell and fix appliances in homes around the City. A paralyzing January 1922 snowstorm again tested Consolidated’s efforts to heat homes and provide electric power. The gas division held up its end and only received 19 complaints. In preparation for a multitude of phone calls, the electric division lined up horse-drawn sleighs near the Baltimore jail to glide quickly to outages. No special measures proved necessary and the Company handled the emergency relatively well. With 100,000 meters installed in area homes and 10,000 miles of cable and wire in the system, 1923 turned into the best year in the history of the Company with a litany of achievements. In switching from direct to alternating current, Consolidated also spent significant sums to improve its steam turbines. Two-thirds of Marylanders now lived within 35 miles of downtown

Baltimore, and a new Business and Merchandising Department was selling electric ranges and refrigerators to the outlying areas where gas was not available. During the 1920s, the Company rapidly expanded both its gas and electric reach throughout Central Maryland. By 1927, it was connected with multi-state efforts working with Penn Water to increase hydro-power. A Company-led commission to improve efficiency and economy clearly improved Baltimore City’s administration and won national headlines as “the Company that helped a city to come into its own.” In 1928 the Company purchased the Terminal Freezing and Heating Company and launched a three-pronged effort to help Baltimore. District Heating manufactured steam for downtown buildings, cold storage facilities helped the vegetable and meat markets, and ice blocks were manufactured and delivered to customers the oldfashioned way.

Consolidated moved aggressively to sell new appliances to lighten the load of Maryland housewives. “Keep the kiddies fresh and happy.”

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Consolidated provided the power to local industries for their massive war production effort. Here, the Company announces its contribution to the war effort.

$165 million and the workforce had grown from 1500 to 5000. The growing business demanded more executive leadership. Four new vice presidents, including future Consolidated leader C. P. Crane, took on the extra duties. President Wagner drew some criticism from the rest of the industry when he refused to sign on to President Roosevelt’s National Recovery Act or Blue Eagle Code. Although Consolidated agreed not to reduce wages or lengthen hours, Wagner did not want to follow two directives, the Maryland Public Service Commission and the crisis-driven expanding reach of the federal government. A surviving 1939 U.S. Social Security Act document describes African American David O’Neil Robinson. He was employed by Consolidated and applied for benefits from one of the most popular New Deal legacies. Later he advanced to meter reader. Even at the height of the Great Depression, business in need of Consolidated power continued to come to Central Maryland. The famous Czechoslovakian shoe company, Bata, fled the Nazis and settled in Harford County. Lever Brothers put together a $2 million local program, and Rustless Iron and Steel, the nation’s largest stainless steel producer, spent $1 million on its facilities. The Glenn Martin Company, aviation pioneers in Baltimore County, continued to grow quickly as MartinMarietta.

“Give us the tools and we will finish the job.” Always looking to improve its reputation, Consolidated launched a powerful 50,000-watt radio station christened WBAL in 1925. The national attention continued when the Christian Science Monitor stated that, “this station has had a standard of program entertainment which we believe has not been exceeded by any independent station.” The Company was a national radio pioneer with popular original programming until it sold the station in 1934. Despite the Crash of 1929 and a deep countrywide depression, demand continued for power even as unemployment and hardship soared. Gas for domestic use had increased 50% in two decades and operating revenue went up 18% as the region entered the difficult 1930s. Consolidated’s management had hardly changed for 20 years but assets had risen from $40 million to

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­ — Prime Minister Winston Churchill to President Franklin Roosevelt, 1941

In 1941 before the U.S. entered World War II, a beleaguered England sought American help in fighting off a possible German invasion. Defense contracts in Baltimore already totaled almost a billion dollars before any shots were fired by the United States. Baltimore industry—steel, copper, ships, and airplanes —were a major part of America’s impressive “Arsenal of Democracy” put together during the war. Before the fighting ended, 500 Liberty and Victory ships had been launched into the Baltimore Harbor. The Sparrow’s Point Steel Mill built many of those ships adjacent to its belching blast furnaces. For its part, Consolidated faced the patterns of earlier


wars as raw materials to produce gas and electricity were in short supply. Over a thousand male Company employees went off to war, and women were called in to successfully fill the gaps in the around-the-clock wartime industry. Gas and electric sales skyrocketed as war production overwhelmed the community. Energy demands almost doubled while production of new domestic appliances slowed to a standstill. The Company preached self help to keep tired irons and refrigerators working. The Company committed resources to a Defense Committee that paid close attention to possible air raids and sabotage. Overtaxed employees, working 70-hour weeks, still had time for $3.5 million in war bond sales as well as blood drives, air-raid duty, and first-aid drills.

Victory came at last in 1945. As a flood of veterans came home and the majority of Consolidated’s servicemen returned to their old jobs. One in four of the Company employees after the war were veterans of the conflict. The old guard that had turned a fractious world of competing utilities into a growing, efficient 20thcentury organization was replaced by a new generation. J.E. Aldred, the forward-looking chairman from 1910 to 1938 who had brought hydro -power to Baltimore, had financial reverses late in life and died in poverty on Long Island in 1945. Herbert A. Wagner, the other company pioneer who had led the Consolidated switch to more efficient alternating current resigned as chairman in 1943 after 36 years of highly respected service.

Consolidated owned and operated WBAL Radio between 1925 and 1934. It was a radio pioneer that reached a national audience.

At the Sparrows Point plant, a major shipyard produces hundreds of Liberty ships to supply Allied armies around the world.

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Chapter 7

Who Does the Work? Diversity and Inclusion

“Historically we have had great and thoughtful leadership, but we built this company.”

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— A BGE lineman with 30 years’ service


Delivering energy has always meant, at base, hard physical labor. An educated guess suggests that in 1820 there were 20 employees of the Gas Light Company of Baltimore. Fifteen of those were either digging ditches to lay pipe or producing noxious coal gas in retorts. There would have been a managing executive, a salesman or two, and a clerk who wrote out bills by hand. Baltimore was the third largest city in the country, a bustling port with a majority population of immigrants. There was lots of work for laborers to build the new Company.

Each of the many newly chartered companies in the 19th century needed labor to expand and maintain pipes and wires, install and read meters, and stoke furnaces to manufacture gas or produce electricity. Early photos show laborers ripping up the streets to lay pipe or erecting poles in any opportune space to string wires. Salesmen became more necessary. Connecting new customers to existing services became a game of cat and mouse between providers. At the end of the century, a single Company put an end to the ruinous competition.

Men laying electric cable in open trenches. Note complete lack of any safety equipment.

Opposite: Digging in mud and water to lay gas pipe is heavy duty labor. A squadron of motorcycle maintenance men stand ready to repair appliances and serve new customers.

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By the turn of the 20th century, “good public service� became the watchword of Consolidated Gas Electric Light and Power Company. Customer queries would be answered by an army of service providers, on foot, bicycles, or motorcycles. Their primary mission was to maintain service but they also repaired malfunctioning primitive appliances: stoves, irons and heaters. The

Company seemed far less concerned with outages than with making sure that the appliances that they sold were performing. New categories of employees appeared. They answered complaints, even on a single telephone line. They sold and repaired electric products, and they read meters and calculated bills. The 1916 American Gas Centenary publication of

Above: An early composite shot of Consolidated employees ca. 1916. A close inspection will reveal a few African Americans, several shirts and ties and a vast number of laborers.

An oyster roast for welldressed men in the 1920s. Separate service clubs were based on years of service.

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Consolidated (which also included electric, but gas had the lead, being the older service) lists the name of every employee with over five years of service. They are grouped by years of service and in alphabetic order with job titles, regardless of status in the company. J.E.Aldred, Chairman of the Board, is listed next to J. Stanley Aler, clerk. There are 408 active employees who have more than five years

of service. A guess would put the total workforce at around 700–750. The titles listed tell a great deal about who did the work. As expected, there are laborers, salesmen, meter readers, linemen and wiremen, pressuremen, cut-offmen, troublemen, and foremen. But there are also caulkers, porters, a chauffeur, trimmer (of lamp wicks but maybe

BGE employees enjoying themselves at the 2015 Bull Roast.

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The Bowen Family

Three Generations of Linemen: 1941 to the Present

It all began when John Bowen went to work as a security guard at Spring Gardens on the eve of World War II. Everyone was nervous about sabotage, and one night John came close to shooting a drunk who was trying to climb a high fence. By 1943, he was overseas as a medic in the army, but when he returned he was back at Consolidated, this time as a lineman. John Bowen enjoyed a successful career for the next three decades. His son Steve was raised to follow in his footsteps. Steve had a BG&E job waiting but had to wait until John retired in 1976. Steve met up with several hurricanes during his career. “Hugo and Floyd were the worst. It took 16 days to recover from Floyd.” He talks fondly about the family that is BGE. “Everybody gets along. It’s a good group of people and nobody gets held back if they want to achieve.” During his 37 years with the Company, he’s seen the linemen go from feeder books to microfilm in a reader to computerized laptops in the trucks. Along the way, Steve has put together a collection of BGE memorabilia that now decorates his son’s basement. In 2005, Jesse Bowen went to work in the footsteps of the two previous generations. It’s quite a tribute to BGE that one family has been so enthusiastic about its work on utility poles around Central Maryland. Jesse carries on a proud tradition with new protective safety equipment and work with other crews out-of-state during emergencies. “If you like the outdoors, the work is good and steady and I am proud I was able to buy a house and acreage at age 22.” The Bowens represent thousands of linemen who are essential Company icons regularly out and about serving their neighbors as needed.

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Three generations of BGE lineman include John Bowen, pictured as a security guard at Spring Gardens in 1942, and Steve and Jesse together with some of the items in the Bowen Family collection. One of those artifacts is a 1920s journal from a Consolidated substation.


Stylishly dressed salesladies in the 1920s are ready to market gas appliances to women in their homes. If they could light a gas stove in those dresses, certainly the lady of the house could also.

The first medical office took care of all kinds of accidents and illnesses, not just work-related ones. An executive seems to have an earache.

trees), draftsman, paver, blacksmith, stableman, driver (of horses), fireman, coal passer, and gas maker. The names appear to be of English/Irish/German/Welsh/Scotch origin, with very few names that suggest immigrants from southern or eastern Europe. Among the list are some 15–20 women, most of whom are clerks, stenographers, and two telephone operators. The names of four charwomen are included

(one with 35 years of service and still active). One lady, Mrs. Henrietta Wilmer Lawrence, has the title of chief instructor. As its centenary approached, Consolidated initiated new incentives for employees. A pension system was introduced in 1911 to benefit not only those who retired (upon request) at 65 but also those who were disabled after 20 years of service or incapacitated in the line

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An iconic lineman of the 1950s

of duty after 10 years of service. Minimum monthly allowance was $15. At this date, the company already had 4 active veterans who had 50 years of service, and 54 men had qualified for the new pension plan (“13 of which are now in the service of a Higher Master”). Consolidated was very intentional in “its desire to have a Welfare Work office, to offer fresh incentives and additional advantages for continued service.” Longevity and loyalty in service were already Company hallmarks. The medical service for all employees began in 1916, primarily to treat work-related injuries but also to provide regular medical care. The Company did not offer medical insurance plans until late in the 20th century. A 3400-volume library for employee use was begun and employees from 1910 onward were offered opportunities to extend their education at local colleges with over 500 employees taking classes. By 1922, Consolidated was actively seeking employee ideas with an Efficiency Awards Committee.

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Employees could belong to the National Electric Light Association, or N.E.L.A., the largest technical society in the world at the time. By 1920 it was not just an electric organization but had become a social group for employees of all departments. The Company created service clubs, based on years of service. Every employee with five or more years of service belonged and each club was given an annual dinner. The clubs are the forerunners of the modern bull roasts. Clubs based on length of service were eventually merged into a single entity with the goal of good fellowship. Club membership is one of the few times that African American employees are mentioned in Company records. In 1916 a service club for these employees with 10 or more years of service was instituted. The Baltimore Gas and Electric News of 1928 lists 38 members with this tenure. D. F. Boston is the longest serving with 34 years. This group is not all laborers or service workers, but includes seven men who worked in merchandising, marketing appliances. As late as 1968, there were separate dance evenings based on race. A single social club was formed in 1971, partly because of the times. The Company did not see the need for duplicating expenses. Women were employed in the 1920s to sell appliances to women. Beautifully dressed, they were equipped to enter the homes of the upper middle class and instruct the lady of the house in gaslight safety and new gas stoves. As with most industries, women employees increased dramatically during WWII in the manufacturing areas, though they did not always keep the jobs when the men came home. Women who had new jobs in offices, customer relations, and sales kept them after the war. In the post-war period, women had their own service clubs with a focus on fashion and recreation. Beginning in the 1990s, they were included in the wildly popular bull and oyster roasts, held for employees across all areas. In 1950, there were 7000 employees in the Company, a number that would grow to over 9000 by 1990. The shape of today’s employee group starts to emerge. The primary need is still for heavy lifting. Field service workers in both gas and electricity push new services to expanding suburbs. The sales force negotiates contracts with commercial firms and real estate developers. A major snowstorm in 1958 signaled the need for a focused


and coordinated response to major outages. Positions in back office roles increase, management becomes more complex, divisions expand, and relationships with customers demand services from new personnel. An historic pride remains in the field service areas. The electricity and gas field workers and troublemen have strong self-identification and pride in what they do. Although gas is the older service these workers now are fewer in number than electric employees. Since the last half century and today, BGE maintains equal opportunities for all employees to move laterally or upward through the Company. New career moves are open to all who have the initiative to take them. Shifts in job responsibilities are Company practice and tenured employees offer training and coaching to those learning new skills. Employees who strive to advance are rewarded with opportunities. BGE has a reputation as a Company that lets you grow. The arrival of new technology in the 1990s has meant dramatic shifts in the employee pool. Many of the tasks once done by employees, such as building security and tree trimming, have been shifted over to contractors, giving the company more flexibility in managing staff. There is a higher demand for technical qualifications, particularly among field service workers who must master computers and communication in the trucks. Meter readers are being phased out, as reading is now done with a technological system in a passing vehicle. The iconic meter reader has faded from the scene. The number of outdoor jobs has been reduced, while inside work in engineering, design, communications, and IT has increased. For most of the 20th century, the executives of the company were engineers, with training to assess technology and make choices about its direction. They helped create a definitive BG&E culture. The leadership they provided was “top down” as they were men who understood change, exercised the authority to respond to it, and expected employees to respond in return. The Company built its business around “best practices” as they understood them in terms of daily operations. The “BG&E way” was not always best or easiest for the consumer, but it got the job done. The first Chief Executive Officer not an engineer was Frank Heintz, whose background was in education, the

With 40 years of BGE service in the gas department, John Lang has seen many changes since he started work in the pipeline ditches. Today, John works with several busy computer screens as a supervisor of Gas Construction and Maintenance.

Legislature and the Public Service Commission. Both he and his successor Ken DeFontes, an engineer himself, began to change the corporate culture. They brought a strong desire to engage employees’ experience, wisdom, and inventiveness to improve the Company. The current CEO, Calvin Butler, a regulatory lawyer with strengths in operations and stakeholder relations, is a man for this 21st century Company. He knows that relationships in the service region, with the State Legislature and with the customers, are the keys to BGE’s future. In 1990, the 9000 employees in the Company assumed that BG&E offered a job for life to those who showed up on time and worked hard. But the 1980s and 90s were a time of contraction. The post-war growth boom was over, environmental concerns were

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A graph of the composition of today’s BGE workforce.

taken seriously, and the oil crisis of the 1970s produced instability in the commodity market. In 1994, drastic steps were taken. Under the leadership of Christian Poindexter, a reduction in workforce was begun. Older employees, many nearing retirement, were offered the opportunity to retire. But, in addition, many qualified employees were also let go, reducing the overall workforce to 7000. Disappointment ran high; however, many knew that the Company had staffed up to handle peaks during the glory years and some downsizing was in order. Deregulation in 2000 also had a dramatic effect on the work force as the Company split in two. Employees connected to energy delivery systems were still BGE. Generation plants had to be sold off, so those who worked in those plants were shifted to new employers. The whole BGE employee workforce, now numbering 3200, began to shape a new corporate identity with a new focus of distinctive customer service.

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The balance between field service personnel and inside desk workers became more fluid as experience was complemented by technical understanding. The need for hard, physical labor remained, but many employees moved from the field to a desk or computer. New technology has meant that the Company did not always have the same workforce requirements it once had. Technology also offered wider opportunities for women as physical skills were not the primary employment requirement. As early as the 1970s, the use of outside contractors helped insulate fulltime employees from changing workforce demands, but employees needed to be open to change and learning new skills. The changes in the past 15 years have been massive. The mission of reliable delivery and the demand for talented workers remain. As many old timers, however, say, either in sorrow or in wisdom, “It’s not the same company it once was.” The newest incarnation is a smart move forward.


BGE and the IBEW Union BGE has the distinction of being one of three nationwide

utility companies that are not unionized. The International

Brotherhood of Electrical Workers (IBEW) has made several attempts to unionize the Company but without success.

The first attempt was in 1963. The well-liked and effective

Company chairman, Ted Wolfe, unfortunately suffered a fatal heart attack and the steam evaporated from the unionizing effort. The Company workforce rejected the union in a 4051 to 521 popular vote. In 1996 a serious union attempt was

defeated 35–65% in favor of the company. The next effort in

1998 was a close election that BGE won narrowly. This was the high-water mark for IBEW as the most recent attempt in 2010 was a lopsided 80–20 vote for the Company

Company leadership credits their attention to employee

issues, fair treatment, a durable partnership between

employees and management, and an ability to include employees in developing the values that have carried BGE for so long. Management has a deep respect for the immense pride, loyalty, and hard work that have

characterized employees, particularly in times of natural

disasters. It is the employees who have carried the public face of the Company.

A key benefit of being non-union is workforce flexibility,

as workers can shift into new roles as needed and move into different positions within the Company. Seniority is not the guiding principle in making work assignments, as it would

be in union shops. Both employees and employers praise the opportunities for career advancement this flexibility offers.

An anti-union rally of employees getting ready to defeat the IBEW. “BGE Gas Employees Fueling the Win.”

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Diversity and Inclusion BGE has been driven by values for 200 years. Communicating honesty, hard work, respect for accomplishments, pride, customer service and loyalty are keys to its long-term success. Now a company with a fixed mission in a defined service area, it has come to understand its relationship with the community in new ways. For much of its history, good service meant doing things the BGE way. In the 21st century, good service means engaging with and mirroring the community which it has long served. The Human Resources Department and BGE leadership focus on diversity and inclusion, implementing a company policy that values a range of differing backgrounds, skills, and personal histories within its wide employee group. Workforce development now identifies and recruits talent from the region, intentionally increasing diversity of employees beyond its historic white male culture. Diversity is not simply a focus on race, gender, or ethnicity but includes a wide range of differences—age, veterans, LGBT, disabled, for example—all of which can enrich the company and increase productivity. Programs in local high schools reach out to students who have physical and technical skills to be successful. Recruiters

A group of employees in the 60s shows off diversity and some current fashions.

specifically cultivate underserved groups and ethnicities. BGE has long had the reputation of treating all individuals fairly in terms of salary, benefits, promotion, and opportunities once they were in the door. The new practices widen that door. The workforce will come to mirror the community it serves. Energy delivery systems have and will continue to require physical skills. The advent of technological tools

Gas trainees at White Marsh learning their craft show the new face of BGE diversity.

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Focus 25

BGE increases the number of minorityand women-owned business partners

Frank Kelly, (left) Diversity Business Empowerment Manager, meets with Ward Tucker, owner of the Tucker Construction Group, an underground utility firm specializing in cable and gas line replacement. Tucker was a member of the first Focus 25 class, graduating in 2014.

The Focus 25 Initiative is an active effort to build the pool

the Focus 25 program engages a selected group of minority-

the BGE service area who are ready to partner with the

Beginning in 2013, each year a class of 8-10 businesses leaders

of minority-, women- and veteran-owned contractors from Company. As early as the 1970s, the Company engaged

contractors for many specific activities once done internally. This policy insulated the employee pool from variations in

the market place and offered many talented contractors and

subcontractors opportunities to engage with the Company. In the 1990s diversity among contractors became a priority, and suppliers needed to meet BGE standards. This effort was not driven by compliance, but was a full attempt to engage the resources of the Central Maryland community.

The arrival of now CEO Calvin Butler in 2013 kicked the

program up to a fast track. Under his leadership, BGE has spent

and women-owned business leaders who apply to participate. has been selected. Class members engage with key BGE decision makers to learn first-hand how to successfully compete for

contracts. Of the 26 participants since 2013, half are general and utility contractors; others include an architect, CPA, marketing, electrical engineers and staff supply firms. Opportunities for

businesses are on a competitive basis. Aspiring contractors are encouraged, coached, vetted, and provided with professional counseling on specific areas of focus in order to build their

business. Frank Kelly brings involvement and experience to the process of getting companies ready to compete at a high level.

BGE’s accomplishments in promoting supplier diversity have

nearly a half a billion dollars with diversity-certified suppliers

repeatedly gained recognition. In 2014 BGE was proud to receive

is to reach a 25% spend on diversity contractors, per a specific

Region Minority Supplier Diversity Council.

through innovative inclusion initiatives. The long-term goal

agreement with the Public Service Commission. In 2014 BGE

purchased $182 million in goods and services from diversitycertified suppliers, a 20.5% increase over the 2013 spend.

BGE’s Focus 25 unique supplier development program

was a partnership with the Maryland Washington Minorities

Company Association and its president, Wayne Frazier. Led by Frank Kelly, BGE Diversity Business Empowerment Manager,

the prestigious “Corporation of the Year” honor from the Capitol BGE’s diverse business empowerment initiative helps equip

participants with the tools and insight they need to successfully navigate corporate procurement processes. This does not only

benefit BGE. It works to drive economic development and create jobs throughout the region, making minority and women

contractors more professional and competitive. BGE is investing in a stronger and more inclusive Central Maryland.

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and equipment in the 1990s greatly expanded the need for different abilities from its employee ranks. Thermal imaging, computer feeder books, and long-range underground drilling require new abilities. The smart meter project demanded new skill sets from a wide range of employees. Technical mastery, long-range planning, computer management, public relations, customer service, forestry, and legislative lobbying were all in demand. Inside jobs requiring technical and social skills brought more women into the employee pool. BGE formally adopted inclusive policies in 2009 through its “Lead, Coach, Manage (LCM)” program, requiring all BGE leaders to buy-in to an understanding that inclusive work practices respecting each individual employee would produce a more effective workforce. The LCM program helps all leaders sustain the inclusive culture. If diversity meant recruiting and growing what is already in the community, then inclusion also means nurturing the range of skills and personalities that diversity has created. The merger with Exelon has accelerated inclusive policies, a key one being the creation of Employee Resource Groups, based on communities of interest among the workforce. Groups are open to all Constellation and Exelon employees in the Baltimore

BGE Pride employees join in at the annual Baltimore Pride parade.

area. Nine different groups invite veterans, Asian Americans, African Americans, the disabled, women, Latinos, LGBT, young professionals, and environmentally concerned to participate. BGE’s goal is to become a thought leader in diversity and inclusivity, removing internal barriers that inhibit inclusion and expanding the networks of resource groups. The Company’s Diversity and Inclusion Council was reinforced by Calvin Butler who chairs the Council and champions its work.

Exelon Military Actively Connected (E*MAC), an employee resource group for veterans, gather around a BGE truck.

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Bonnie Sersen Myers First Female Meter Reader 1972–2008

A native of Baltimore, Bonnie Myers, joined BG&E as the first

female meter reader in 1972. The company was actively hiring women, but many women who took on meter reading found

it was not to their liking. Not Bonnie. Having spent a few years as a secretary, Bonnie disliked being behind a desk. Being

outdoors and having a measure of independence was what she wanted.

During her six months training, she saw a great range

of Baltimore neighborhoods. Growing up in Canton she was

not even sure where West Baltimore was. Now she saw all of

them. While most customers greeted her warmly, she heard a few comments, accusing her of taking jobs away from a man. Other employees told her she would never make it, but she

was determined to do everything the male meter readers did and do it just as well. She even learned to leap neighborhood

fences, until the safety offices banned it. From her first day, she just loved the job.

For the most part, she worked in Baltimore City, walking

ten miles a day to get readings in row houses. Ethnic

neighborhoods were a joy, full of good smells of Italian, Polish, and Greek cooking. Cheerful customers offered tastes, and she quickly gained 7 pounds. She read meters on the Block

and in a nudist camp in Crownsville. Houses with rats were her worst fear and she jangled her bunch of 40+ keys to

scare them away. Rarely were there truly difficult moments. In some neighborhoods, it was best to be off the streets by

early afternoons. Shouting “gas lady, gas lady” as she entered a house, she encountered some folks who were clearly not

prepared for her visit, but they told her just to read the meter and go on. The BGE uniform was a kind of protection, the identity badge of a respected and valued company.

Meter reading was a pencil and paper exercise in 1972,

though an office computer read the ”set of books.” By 1990 a

hand-held device would read the meter automatically, and by

1998, an apparatus in vehicles could read external meters from the street. The handwriting was on the wall: meter readers would eventually be phased out.

When she started there were some 210 readers; re-

ductions began in 1994 and when she retired in 2008 there were

100 readers in the City. No one

was actually laid off, but attrition reduced the ranks.

Meter readers were the

cheerful human face of BGE.

They were “here to help.” Smart

meters provide a quantum leap in

information and usage monitoring for today’s customer, initiating a new form of customer relations, but the personal touch of the meter readers is no longer.

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Chapter 8

Safety “What do I like about working for this company? Safety. I used to be a plumber and sometimes I found myself in a 20 foot deep hole with no interior support. Guys get buried like that. When I came to work at BGE the first time I was in a 8 x 20 x 10 deep hole, it was shored up with planking. This, I thought, is what safety looks like.” ­

— A BGE gas field worker with 25 years’ experience

An early British cartoon exhibits the dangers of gas.

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Safety is the first and oldest value in BGE and all its predecessors. The safety of its employees, followed by the safety of its customers, has been its highest concern. Because its products are inherently hazardous and capable of causing injury, the Company safety regulations have evolved for its employees, contractors, and the public. The emphasis on safety has remained the constant priority, but the ways to be safe have changed over time in response to new technologies, new customers, and new understandings. An injury would give rise to a new idea, innovation, and practice. The safety program continues to evolve as past injuries or near misses form a basis for developing proactive ways to mitigate risks. Gas was initially manufactured from coal tar, largely by heating and distilling it, capturing the gas, and sending it through pipes. The gas was not difficult to manufacture. Many institutions and households generated their own, even though it was noxious and smelly. Rembrandt Peale constructed a small gas manufacturing plant at the back of the Peale Museum. But the evil-smelling gas had fumes, mostly methane and carbon monoxide, which could prove deadly or debilitating to the homeowner. Employees of the gas


Gas construction workers with planking, but with different safety equipment. In the earlier photo, ca. 1940s, men have no gloves, hats or glasses. Today’s well-protected gas men have just joined a 20-inch and a 40-inch gas main.

company were equally liable to suffer from exposure during the manufacturing process. Laborers digging up the streets to lay pipe had no safety standards at all. Customers were concerned about possible explosions, and that anxiety hampered early sales. There were indeed explosions, modest by current standards, and frequently caused by ignorance. Local newspapers, including the Baltimore Sun, reported some two to three annual explosions on the eastern seaboard in the 1830s and

40s,. When things went wrong and the lights went out, some eager person would carry a lighted candle into a room to investigate, only to create the explosion he was attempting to avoid. In the main, rooms were damaged, not whole houses, but personal injury was frequent. It seems that the dangers of gas in the mid 19th century were far greater for the customers than the employees. Since institutions and establishments that were located beyond the reach of the gas lines were allowed

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Digging up the streets eventually made this kind of accident inevitable. Safety with vehicles is a top priority today.

to generate their own gas, and some explosions occurred outside the Company’s reach. In 1873, the gas house serving the new College of Notre Dame in Govanstown exploded, destroying the house without any injuries. With the expansion of size, the building of a serious gas works at Spring Gardens in 1855 lifted gas manufacture to a new level. Electricity carried the same challenges. In the haste to create new customers in the 1890s, myriad overhead wires could become detached. Live wires dangled in the streets, with dangerous results. After Consolidated was formed in 1906, it attempted to modify the dangers, offering repeatedly to come out and check equipment or advise customers on usage. Early manuals talked more about the proper upkeep of appliances than the safe use of electricity or gas. The assumption was that those who purchased stoves, heaters and other new products were literate and could follow written instructions about use. Companies worried much more about the malfunction of

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the appliances they had sold rather than customer safety. Safety for employees can be traced to the evolution of safety equipment and a series of safety handbooks. The Electrical Distribution Handbook of 1940 attempts to specify some appropriate work clothes—no finger rings, dangling watch chains. Loose neckties or sleeves may cause accidents. By and large, men in the field wore ordinary clothes and caps. Men were instructed to avoid “horseplay, scuffling, wrestling, ‘goosing’ or pranks,” as practical jokes could cause injuries. Rubber gloves and sleeves were required for working on live lines, on street lighting circuits, and within 2 feet of live lines. Goggles were necessary when chipping or drilling concrete. If gas was detected, the public was to be warned and the worker stayed on the spot until the gas troubleman arrived. It is clear that the 1940 booklet is attempting to codify behavior at what might be thought an obvious and basic level. Workmen in the field needed explicit instructions, but accidents created the need for


In the pre-safety cone era, homemade wooden barriers surrounded the open manhole. The flag holder, probably a contract worker (day laborer) readies his flag for action. Inside one of the large Spring Gardens gas holders. They were seated in water and once a year, after the gas was vented, the interior of the holder was checked for safety. The boats were permanent fixtures inside the holder. Note the boat’s name after someone’s girl friend.

more thorough and sophisticated regulations to prevent injuries. A primitive hardhat was used as early at 1910, but it looks more like a Viking relic than protective equipment. Hardhats were not required until 1970, and once introduced were subject to the directive of a supervisor who may have had 30 years of experience

without wearing one. Early hats were not always comfortable as they had only canvas straps inside. Photos of a group all wearing hardhats in the mid 1960s can elicit the comment that a few of those pictured were probably wearing hardhats for the first and probably last time. Only leadership focus on the use of safety equipment would produce a cadre of employees who

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put on hard-hats automatically. Making safety practices uniform for several thousand employees did not happen over night. The medical office, instituted in 1916 with three physicians present daily, provided full medical care. The most common injury was dog bites, a regular complaint of meter readers. The medical office, reduced to a nursing and consulting staff in the mid 1980s, treated workrelated injuries only. Personal injuries, based on OSHA standards, and vehicle related injuries were tracked monthly and reported on safety tally boards in all buildings. “Safety rules were written in blood.” said a lineman with a long history with BGE. Early Company manuals proclaimed that accidents “don’t just happen.” They always had a cause. Each accident was subject to a

Gas workers warn the public about the presence of gas.

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thorough company review. The injured were sent to the medical office, but workers did not always want to go. Seeing the doctor might reveal some infraction of the rules, leading to suspension or worse. Service operators who violated safety rules were often sent home “to think about it,” sometimes with loss of pay for the time out. Discovering the cause of an accident was the Company’s goal. By the 1990s, the focus of accident review was on understanding what happened, moving forward to learn from the incident and put measures in place to prevent future accidents. The reluctance of field workers to report accidents diminished as they saw that the Company’s goal was to improve safety, not penalize workers. In the case of a serious injury, an immediate full review brought other activities to a halt. Discovering the cause was


A lineman in full safety gear

critical. Field workers began to understand that their honesty about their own behavior and human error, at every level, was a practice that in the long run would protect them. Integrity became a key value in making safety important. As one lineman put it, “The Company wants three things: commitment, effort and honesty.” Today safety is a fully integrated part of everything that BGE does. By 1990 the gas and electric divisions and cultures were merged, and a complete, Company-wide

culture of safety was developed. A Chief Safety Officer was established to lead safety programs to ensure employees remain injury-free. BGE’s safety program focuses on the whole individual—on the job site, in the office, behind the wheel, and at home. Programs support risk identification and mitigation strategies with the goal of preventing injuries. State-of-the-art training programs, prevailing work practices, policies, and procedures, an emphasis on safe and defensive driving, best-in-the-industry personal protective equipment and tools, and engagement at all levels (by leaders, employees and contractors) create the safest possible work environment. BGE is committed to an open and trusting culture that promotes collaboration, empowerment, and accountability to further our purpose of working, driving, and living injury-free.

The helmet is standard BGE insignia.

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Chapter 9

Reliability “In looking to the many causes of evil and crime which abound in our city. . . , one of formidable magnitude will be found in the IMPERFECT and INSUFFICIENT manner in which the city is lighted.”

— J.H.T. Jerome, Baltimore Mayor, to the City Council, November 21, 1850

Gas mains being laid in the streets were necessary to expand service but created massive inconvenience to travelers and vehicles.

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In 1816, not much was reliable. In fact, not much was reliable through most of the 19th century. If there are two key contemporary values in managing energy, price and reliability, only price mattered from day one. The newspapers were full of discussion: How much would the City pay for lighting? How much would customers be charged? Would the new meters just be a trick of the Company to charge more? Should gas rates be regulated by the government? Could competing companies have a price war and still survive? Reliability is a function of expectation, and nobody really expected much in terms of steady service. Gas service grew slowly as the infrastructure inched along. Gas was the new desirable phenomenon, but not everyone could get it. Certainly the ordinary worker could not afford it. Gas was always in the pipe because you could store it, but its cleanliness and brightness varied with the manufacturer and how carefully it was filtered in production. One of the few reliable expectations was that gas would not kill you if you followed the protocol. Electricity was an even more fragile process because usage required constant production. Its greatest weakness was, and still is, that it could not be stored. If no one was shoveling coal, there was no energy. Managing the load was a learned skill, and those manning the


Maintaining enough energy required constant shoveling, hot and dirty work. The Great Baltimore Fire of 1904 fire was the low point in reliability, though gas service survived. The Company and the City responded by rebuilding a stronger and bigger infrastructure, including Westport, the large central electric generating plant.

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The Westport plant generated more electric power than any previous facility. This romantic illustration suggested that generation was part of the natural scene.

boilers often shoveled to their own rhythms rather than the customers’. Like gas, the initial use of electricity was solely for lighting. In the late 1880s, three separate circuits in the business section of town carried power from 7 a.m. until midnight. After that, darkness prevailed, as respectable citizens should be safe at home. Companies, both gas and electric, needed customers to use more energy throughout the day, not just for lighting. Customers were urged to buy appliances to help even out the load. Peak shaving was not a 19th century phenomenon. During the fire of 1904, gas was reliable as it survived but electricity did not. Gas lines were not damaged, and

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Company executives scurried to save records by moving them twice out of the path of the fire. The primary concern was to protect the lead in the joints of the exposed mains stretching over the Jones Falls. If they melted, unchecked gas would pour out. Production at Spring Gardens and Canton kept the pressure steady in the gas lines after the fire. Electricity was not as fortunate. Damage in the Burnt District to poles, wires, arc lamps, and meters totaled $61,000. Lost revenue amounted to some $150,000. The McClellan Alley Substation survived the fire as its large banner proudly proclaimed. As part of the recovery from the fire, plans were laid to build Westport, the first large


“Good service for all,” meant selling more appliances.

generating plant. In the process of rebuilding, the ugly tangle of wires was put underground in the downtown district. Reliable energy meant that production was exceeding demand. Larger generating plants began to deliver a steady load as industrial and residential customers demanded more. Advertising concentrated on selling appliances to promote more usage. Customers’ complaints focused on poorly functioning appliances, not availability of supply. Consolidated encouraged customers to contact the office for help. The Company prided itself on offering a “Good Public Service,” meaning good attention to complaints. From the 1910s to the end of WWII, the Consolidated Gas and Electric Company was more interested in selling energy than in promoting its reliability. During WWII, industry focused on the war effort rather than the retail needs of customers. Patriotism was more important than reliability. Once the war was over and suburban growth began, Consolidated was again promoting energy use in new construction and through attractive home appliances. A rare major snowstorm in March 1958, dumped two feet of snow on Baltimore in a day, leaving 100,000

The massive storm in 1958 was a wakeup call that outages, not just price, were an important consumer issue.

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Front Street Yard was the major supply center for the entire territory.

Ranks of trucks ready for bad weather.

customers without electric power. This was one of the early tests of the company’s ability to respond to a natural disaster. More than half of the outages were restored in three days and the rest over the course of a week. Reliability of service was redefined as overcoming outages, not just providing adequate power loads. While gas was always more stable in the face of major storms, it was affected if water entered the gas lines. Filtering trucks lined up to remove the water and repairs took place underground.

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Gas was subjected to market conditions that undercut reliability claims. Both in 1919 and again in 1972, the Company sounded the alarm of a possible “gas famine� and encouraged customers to cut back on using gas for heat. The gas shortage of 1972 alerted the country to its dependency on foreign sources of energy and spurred a greater attention to natural gas within the U.S. Natural gas proved to be exceptionally reliable as a source of power, ultimately making it more important than coal as a power source.


BGE contracts with helicopter teams to maintain hard-to-access lines. Wearing a special safety suit, the lineman can work on active lines.

In 2000 deregulation brought changes that shifted the meaning of reliability. As BGE was no longer in the generation business, issues of reliability were now focused on the infrastructure of pipes and wires rather than providing adequate power. While new lines have been placed underground since the early 1970s, the aging overhead infrastructurre is vulnerable to the power of nature. If reliability is a function of expectations, then BGE’s outstanding ability to respond to major natural disasters has raised the bar. When there is an outage, customers now expect power to be restored promptly and they have tools to follow that progress. BGE has learned from complex and difficult snowstorms and hurricanes to anticipate the scope and intensity of disruption. Accurate weather forecasting, a sophisticated system of tracking outages, and a triage system of getting needed services back on line are all in play. The clear test of responsiveness was Hurricane Isabel in 2003 as more than 790,000 customers lost power. BGE prepared before the storm and was ready. Crews were recruited from neighboring areas; warehouses were fully stocked with wire, poles, and necessary hardware; dry ice was ready for distribution. This time half of the outages

were resolved in one day and everyone was brought back on line within eight days. Customers were overwhelmingly positive. Crews could hear cheers when the power went on. This intense responsiveness, with military precision and all hands working 16-hour days, was BGE’s finest hour. The employees’ satisfaction at resolving complex problems and helping others was at its peak. Full mobilization in the face of nature’s fury best exemplifies the pride that BGE employees take in their work and in their Company. The advent of information provided by smart meters takes reliability a step higher. The Emergency Operations team has a sophisticated grid network, both for distribution and transmission. It can now pinpoint the location and extent of damage. Customers’ calls about outages, both large and small, are fed into a monitoring system. It assigns repair crews or uses self-resolving software which is able to reroute power around breaks and restore feeder lines. Two-way communication gives customers and crews precise information about damage and estimated time of repair. Customers who see the extent of the response in restoring power will have new expectations of

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Reliability means repairing outages in the worst weather.

BGE’s ability to provide reliable service. Its massive infrastructure requires 24-hour monitoring with the ability to respond to outages at all hours. Reliability has become the standard of judgment for the performance of a modern utility company.

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A sophisticated Emergency Operations is command central for receiving reports of outages, big and small, identifying the trouble, and directing crews to the site.


The Right Tree in the Right Place

A contract worker trims a tree that interferes with the wires. The “Right Tree” motto gives a positive perspective to a knotty problem. The single greatest cause of outages is trees and tree limbs falling on electric wires. Maryland has the oldest state tree law in the country (1914), which protects trees on the public right of way and sets high standards for allowable pruning and removing trees. BGE follows the guidelines of this law to both protect and remove trees. In the 1920s there were fewer electric wires and fewer trees in residential areas. Wire conflicts were limited and linemen were able to manage necessary trimming to keep trees from wires. The suburban housing spread after WWII brought a significant increase in new electric lines and new trees. By the late 1970’s, the trees were maturing and beginning to require an expanded management program. Specialized tree crews were necessary and by the early 1980’s professional foresters were employed by the Company to develop a state-of-the-art vegetation management program. Today BGE has over 500 contract tree personnel. Initially BGE

had a ‘knock and trim’ process, notifying property owners about impending tree work. Currently trimmers use customerfocused door hangers and provide website information, paving the way for successful work completion. Until 2012 clearance standards for tree work were developed by each utility, and trimmers often relied on personal judgments. In 2012 the Maryland Electric Service Quality and Reliability Act was passed. It established numerous requirements for utility tree work, including minimum clearances between trees and wires and cycles for trimming. Officially mandated clearances have helped BGE to improve electric service reliability. While tree and wire conflicts will not disappear anytime soon, BGE has been promoting the Right Tree in the Right Place program to encourage property owners, local jurisdictions, and developers to plant lowgrowing trees near overhead wires to reduce future problems. Working with neighbors as partners has proven to be a better path to improved electric reliability.

The Right Tree Hedges and Screens (6 - 15 feet tall) Less than 25 feet tall 25 to 40 feet tall More than 40 feet tall

Hedges and Screens: 6 to 15 feet tall  Hollies - Japanese, Chinese, Blue

For trees that grow less than 25 feet tall  These trees are appropriate for planting

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Chapter 10

A Golden Age 1946–1970 “If there is a much better utility company

in the U.S., I’d have a hard time finding it.”

— Investor’s Reader, 1948

At the close of World War II, Consolidated was looking forward to a promising future. In spite of spirited competition during it first century, the regulated utility of the 20th century continued to see growth and development in Central Maryland without any serious “industrial wrangling.” The great generation of leaders, J. E Aldred, Charles M. Cohn, and Herbert Wagner, passed from the scene within two years of the end of the war, but new leaders like Charles P. Crane were up to the task of continuing to build a modern company. Consolidated now had 6000 employees. The high maintenance of 17,000 gas streetlights still in use was a reminder of the past, earning Baltimore the nickname “City of Distributed Darkness.” Over 11 years, gaslight was replaced by electricity. Mayor Thomas D’Alesandro Jr. officially extinguished the last gas streetlight at Little Italy’s Fawn Street and Steamers Alley in 1957. Industry prospered again in the late 1940s and grew almost ten times in the next decade. Baltimore was the country’s sixth largest city with a busy port that was second in the nation. Sparrow’s Point, among the nation’s largest steel producers, remained Consolidated’s largest customer. Adding more than 20,000 new customers every year, the Company launched a $100 million construction program, spending $21 million for new power plants in 1948. The gas streetlights of Baltimore were finally retired after 140 years of service.

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Natural gas, introduced in 1950, revived Spring Gardens.

In its first 108 years, the Company had grown to $100 million. It took another 21 years to get to $200 million and a scant five years to get to $300 million. Customers increased at an annual rate of about 20,000. The growth was unprecedented and Central Maryland’s population grew 1/3 more than the national average between 1950 and 1960. By 1959, 98% of U.S. homes were connected to electric service, a milestone, as utility companies were now serving almost all of the population. The manufactured gas business, however, was in steady decline. Costs were growing to supply 40,000 customers, and many customers used less than a dollar a month. The answer was natural gas, transported to the Baltimore area, a product and process that had been four decades in the making. Abundant supplies from as far away as Texas and new pipelines, both “Big Inch” and “Little Big Inch” built during wartime, gave Baltimore access to the commodity. Consolidated built

a 15-mile, 26-inch pipe (called the Granite Line) west of Baltimore to hook up with the big pipelines. More than 1300 employees were involved in the conversion of Spring Gardens and within a few months of intense work switched customers’ meters and appliances over to natural gas. The new commodity changed the face of the old gas plant. Although it continued to manufacture gas as a reserve for peak use until 1971, liquid natural gas, stored at -260°F, only took up 1/620th of the space. The changeover became increasingly important as later gas crises doubled the need for increased storage at Spring Gardens.

“We already have enough wire on our poles to encircle the globe at the equator with sufficient spare to run to China and back.”

— Charles P. Crane, President, 1954

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A BG&E serviceman comes to the rescue in the great 1958 snowstorm.

A happy electric customer shows off her new refrigerator to her children.

While President Crane was crowing about the Company’s reach, Consolidated took on Hurricane Hazel in 1954 and restored power to all but 30,000 of the 150,000 affected in 48 hours. In 1958 a record snowstorm in late March made a memorable arrival. For the first time, rental helicopters were used to survey the damage. Bel Air was hit the hardest. Over 3000 workers were proud of their accomplishment, putting everyone back on line in a week. After they worked day and night to put in 378 miles of new wire on over a thousand reset poles, one worker commented, “You don’t get people working up to 30 hours without a break just for that dollar. They were dedicated people.” Starting with an important name change to the Baltimore Gas and Electric Company in 1955, the new BG&E continued to develop programs and infrastructure to meet the demands of a growing and more sophisticated market. Joining seven other electric distributors in the Middle Atlantic region, the Company helped form PJM Interconnection, a consortium that became one of the world’s largest integrated utility groups. An aggressive ad campaign, “Housepower,” aimed to wire houses for the additional load needed by new appliances. Many older houses had antiquated wiring and BG&E offered upgrades.

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Even with the addition of natural gas, BG&E needed to generate more electricity. The H.A. Wagner Generation Station, built in two phases on Curtis Creek, was followed by improvements to the Riverside Plant on Bear Creek and the Charles P. Crane Plant in 1961. By 1959, the Company was generating over 1 million kilowatts and burning record amounts of coal. At the same time, it began to plan for the advent of atomic energy. The power transmission stations were celebrating 18 years and 8 million work hours without a single lost-time accident, a record that won national awards. When the 1960s arrived, Baltimore City was riding a new wave of confidence with the Baltimore Colts, an NFL champion football team led by the legendary Johnny Unitas, and the new developments in downtown’s Charles Center. During the turmoil and change of those


NFL champion (1958, 1959) Baltimore Colts, led by quarterback Johnny Unitas, were Baltimore’s biggest claim to fame. (Courtsy Maryland Historical Society)

years, BG&E was celebrating successes that it called the “Decade of Victories”—more income, more customers, more power, more expansion. While BG&E continued to build and enhance electric generating plants, it created an engineering marvel to store propane for “peak shaving,” the ability to provide gas reserves during peak usage. It took two years to dig out a one-acre cavern called the Notch Cliff PropaneAir Plant. An estimated 70,000 tons of limestone were excavated and brought up a long shaft to make the 20foot wide by 40-foot high storage cavern. When popular Board Chairman J. Theodore “Ted” Wolfe died in 1963 after a 31-year career, the entire Company was shocked. His death set in motion some important changes. Within a year, the new chair, A. E. “Jack” Penn, was looking to revamp an administration

that had hardly changed since the 1930s. The result was an executive-led committee that met 190 times over two years to thoroughly investigate a reorganization. C.E. Utermohle Jr., later Company President, led the committee and explained the changes that totally revamped the BG&E administrative structure and began efforts to hire women and minorities. BG&E celebrated its Double Diamond 150th Anniversary in 1966 with a large addition to its iconic G&E headquarters in Charles Center and with bonuses to customers. On the eve of the celebration, a rush-hour blackout that began with a faulty relay in Canada and spread through eight states, affecting 30 million residents of the Northeast, shook the whole utility industry. Nuclear energy had been on the Company’s agenda since the early 1950s. Fossil energy, especially

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Notch Cliff Propane Storage facility was carved out of limestone. Initially one worker went down in a bucket and created enough room for another to join him. Eventually a small bulldozer was lowered and remains there still. An anxious-looking worker begins his descent.

Big mainframe computers made their entrance, keeping track of customers’ accounts.

coal, was becoming expensive and controversial. All of the leadership from Penn to Utermohle and nuclear specialist George McGowan were committed to building a nuclear plant. By 1967, they announced plans to build a pressurized water nuclear reactor at Calvert Cliffs in Southern Maryland. The costs were the largest in Company history, $80 million alone for the first delivery of the fuel. The predictions, however, indicated that a closely regulated nuclear plant would be a positive contribution to replace dependency on coal. As the decade came to an end, there was good and bad news for Central Maryland. More than 50% of

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BGE’s expanding business was now out in the counties. Columbia, the “City of the Future,” was planted and growing in Howard County. Baltimore purchased 223 acres around the Inner Harbor to create an iconic attraction, drawing tourists to an “urban renaissance” in the city. Difficulties came from tight money, government regulations, and rising costs. The turbulent but profitable 60s ended with serious riots in many cities including Baltimore. BG&E would face headwinds as the 1970s brought nuclear power, a potent environmental movement, and financial challenges that would change the Company.


CECIL COUNTY

HARFORD COUNTY

CARROLL COUNTY B A LT I M O R E COUNTY

FREDERICK COUNTY

Y

B A LT I M O R E CITY

MONTGOMERY COUNTY ANNE ARUNDEL COUNTY

WASHINGTON D.C.

BGE Territory served with electricity BGE Territory served with gas and electricity BGE Territory served with gas

PRINCE GEORGE’S COUNTY

CHARLES COUNTY

CHE SAP EA KE

BA

HOWARD COUNTY

C A LV E R T COUNTY

The BGE territory has expanded with the growth of Central Maryland.

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The Era of Smart Energy 1970–2016 A Venerable Company Finds Its Way in Evolving Times

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Chapter 11

Protecting the Environment and Delivering the Power “Plans to protect air and water, wilderness and wildlife are in fact plans to protect man.” ­

— Stewart Udall, U.S. Secretary of the Interior, 1961–69

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Opposite: Workers perched 200 feet up on the old Westport plant in 1971, ready to take it down brick by brick.

Right: Coal, nothing but coal, on the way to generating plants.

Baltimore ca. 1920 with smokestacks aplenty. Large gas holders at Spring Gardens and giant smokestacks at Westport are in the background.

From the beginning it was coal, all the way. Maryland had it; the growing United States had it; Europe had it. Coal was the engine of the Industrial Revolution. Originally it was a source of household heat, and its beneficial powers were as valued as its potentially damaging effects were decried. As early as the 12th century, King Edward I of England complained about the evil effects of coal smoke and dirt. King Edward III, in the war-filled 14th century, championed the use of coal as a trading commodity with Calais, France. Renewable sources, like wood and water, could provide limited amounts of energy, but a growing

Baltimore demanded more. The real choices, in the early 19th century and now, were fossil fuels: coal, oil, and gas. Gas was manufactured early on from coal. Spring Gardens, built in 1855, was one of the largest coal gas manufacturing plants in the country through 1971 when the conversion to natural gas was complete. Coal came in large quantities by rail and ship to feed the retorts. Coal was burned in furnaces to produce the first electricity. The first sizable generating plants, like Westport, burned coal, and lots of it. Any early 20thcentury industrial landscape shows active smokestacks. The utility industry provided necessary power at

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BG&E introduced Central Maryland to nuclear power at the Calvert Cliffs plant in the 1970s.

unprecedented levels. In the 1960s, one BG&E generating plant, Herbert A. Wagner, was burning some 13 tons of coal per hour. Not until the 1970s, was there serious concern about the consequences of emissions from coalburning plants. The first national alarms concerned smog in California and acid rain in New England. Environmental issues were about to become a game changer. In 1970 Congress passed the Clean Air Act, major legislation calling for federal regulation to address what was clearly a growing issue. The Environmental Protection Agency, created in 1973 to carry out the work mandated by the Act, imposed regulations on power plant emissions. At that point BG&E had four coal-fired plants, a massive generation infrastructure dependent upon coal. Nuclear energy was the first attempt to move beyond fossil fuels and to provide clean and affordable energy. The Company built two nuclear units at Calvert Cliffs, costly and complex undertakings requiring immense planning and permitting. Led by future CEOs Christian Poindexter and George McGowan, the first Calvert Cliffs unit opened in 1975, the second in 1977. Calvert Cliffs provided up to a third of the electric power in the PJM region, but coal-fired plants were still a necessary part of the picture. In the 1980s, BG&E attempted to move away from coal and planned an oilfired plant, but the price of oil forced a change. Brandon

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Shores, the largest coal-fired plant, was refitted to reduce emissions at a cost of almost $1 billion, making it as clean as possible. The Company began an effort to turn customers into partners by encouraging reduced usage. Energy conservation was the watchword, but customers were given primarily advice, not yet provided with tools to decrease usage. The availability of energy-saving appliances and practices helped customers lower their energy needs and their bills. BGE* had spun off its generating plants as part of deregulation, but the public continued to link it with environmental issues. In 2015, coal was still responsible for 43.5% of the residential energy used in the PJM area. Moving from coal to other forms of energy and meeting the demands for power is a slow process. Infrastructure was built to last 20 years or more, and change is incremental, not responsive to politics. Current legislation has targeted emissions from coal-burning plants as a major source of pollution, setting long-range targets for reduction. Today’s BGE has a role in offering choices to the customer for fuel sources, and in working with customers to reduce usage. Coal mining as an industry is slowing down, and cleaner-burning natural gas is on the rise.

* BG&E designates the Company until 1993 when BGE is adopted.


Taking Care of the Land Under Transmission Lines

Native plants thriving under transmission lines

The Environmental Management Unit at BGE addresses a range of issues. They focus on cleaning up previous environmental damage—former gas manufacturing plants and substations, oil spills, waste disposal. Another focus is on nurturing things that are already clean, preserving wildlife habitat, and preventing erosion. A primary example is BGE’s care of the 600 acres of right of way under certain transmission lines. Ordinarily that land is just mowed, but BGE’s Vegetation Management Unit has implemented an

integrated vegetation management plan. Instead of mowing they have introduced native plants, making the right of way more inviting to birds, pollinators and monarch butterflies. Herbicides help to facilitate the site conversion by controlling the growth of undesirable vegetation, and transmission rights-of-way become more sustainable habitats. BGE is a leader in this practice and in cooperation with the Patuxent Wildlife Center has generated research to share with other utilities to encourage the adoption of these practices.

In cooperation with the University of Maryland, BGE undertook a project to save the sundial lupines, a rare native plant, from extinction.

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ISO 14001 BGE’s Environmental Management System follows the rules set out by the International Organization of Standardization (ISO) 14001. This is a voluntary international standard that outlines specific requirements for environmental management systems. BGE received company-wide certification in 2012. Using third party surveillance audits, BGE seeks full re-certification every three years. BGE, as an Exelon company, has pledged full compliance with all federal, state, and county environmental laws and regulations. Employees and communities share expectations for a healthy environment and adequate reliable power. How well Exelon companies manage interaction with the environment is critical to meeting those expectations.

BGE employees volunteering for tree planting

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Although BGE no longer generates energy, it is still the face of energy to the customer. BGE is perceived as part of the issue, and it takes responsibility for helping to meet Maryland’s clean energy targets. In 2004 there was no public energy efficiency program at BGE. Since then BGE has become one of the key leaders in promoting energy conservation. The EmPOWER Maryland legislation, supported by BGE, is one of the most aggressive programs in the country. It aims for a minimum of 20% clean energy use by 2020. Maryland’s energy efficiency target cannot be met by BGE alone, but the Company’s response to this target has been much deeper than just giving tips on lowering usage. The plan to install and operate smart meters and to build the necessary smart communications grid is an aggressive and technologically advanced response. With the approval of the Maryland PSC and a grant of $200 million from the Department of Energy, the smart meter program was underway. BGE is one of the first utilities in the country to use smart meters to allow customers to monitor energy usage. With the final installation of 2 million smart meters, customers have the tools to be full partners in knowing and reducing energy use. The energy utility is one of the few businesses that encourages customers to use less of its product, not more, so customers can save money with reduction and also be environmentally conscious. BGE CEO Calvin Butler welcomes targets and regulations, even challenging ones.

“Targets are essential for success. We want to be good citizens and live up to the public’s expectation of how we can care for the environment.”

— Calvin Butler, Chief Executive Officer, BGE

But meeting targets is a shared labor between the Company and its customers. Customers need to reduce their usage to meet targets and they need innovative energy products and services. BGE offers many ways to help them do that. It has to deliver the affordable, reliable, clean energy that they expect.

BGE employees moved an osprey nest from a transmission tower to their newly-constructed nesting platform. BGE workers successfully move an osprey nest from a transmission tower to a specially erected platform.

In the largest sense, fossil fuels are a finite resource, requiring judicious management to minimize the damage that they can inflict on the environment. They are likely to be around for the foreseeable future, but in reduced and targeted ways. The shift to new forms of energy is inevitable and already underway. Rob Biagiotti, BGE Vice President for Customer Operations and Chief Customer Officer, lists three attributes that will help make the shift away from dependency on fossil fuels: * The continued development and installation of effective solar panels * The development of batteries that can store electric power * The use of devices and appliances in residences and industry that require less power Newer technologies like wind or wave power are still being tested on a large scale. There will be new sources of renewable energy that we have yet to dream of. Whatever shape that energy takes in the future, BGE is poised to be the trusted partner in both delivering power and helping the customer make wise and efficient use of it.

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Chapter 12

Deregulation: BGE is Reborn as a New Company “This is a big organization in a very dynamic and rapidly changing world. The challenges facing us today are greater than we’ve ever faced. But I know that we have what it takes to succeed. We have a strong company and top notch employees.” — Chris Poindexter, Chief Executive Officer, January 1998, planning

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for the restructure to meet deregulation


As an unchallenged vertical monopoly, Consolidated and then Baltimore Gas and Electric provided reliable energy to Central Maryland for almost a century. It built generating plants to meet the expanding needs of industry and delivered energy to the spread of new service territories. After WWII, the expanding suburbs created not just new customers, but new customers with a greater array of home appliances. Washing machines, vacuum cleaners, mix masters, home freezers, larger gas stoves, and many other labor-saving devices were all in demand. BG&E anticipated and met this expansion, making a steady and growing profit margin through the 1950s and 1960s.

The Company spreads its wings In 1978, Congress passed the Public Utility Regulatory Policies Act (PURPA), which allowed independent power producers to sell electricity to utilities. BG&E* could participate in a commodity marketplace. It could compete, at least in one area, outside of its boundaries. Bernard Trueschler, then Chief Executive Officer, formed a new company whose mission was to have “diversified holdings� and produce new capital. BG&E began to sell excess energy from its generating plants. The new holding company became Constellation Energy, a unit under BG&E, but operating outside the regulated utility company. Nationwide, the movement to deregulate electric power emerged again through a demand for fair competition. Much like the deregulation of the telephone, banking, and airline industries, the importance of options for customers was paramount. Large industrial companies compared energy costs in their home service areas to those of utilities in other areas. They wanted to go shopping. Energy was a market commodity, not a regulated necessity. * BG&E designates the Company until 1993 when BGE is adopted.

First to deregulate was California in 1996, where energy became a traded commodity. That state’s legislation permitted only spot purchases of energy, not long-term contracts, a practice that had unforeseen consequences in market manipulation. Enron Corporation became the top trader, exploiting new markets to produce profits for themselves and wildly fluctuating costs for consumers. The Enron crash was another wakeup call that competition did not always create fairness for the customers. Leadership in the Maryland Senate determined to follow the deregulation model. With the influence of BGE leadership, specifically that of Chief Executive Officer Chris Poindexter, better legislation was written. It addressed some of the California problems, particularly with spot purchase issues. Reminiscent of the 19th century, the Legislature was again called upon to moderate or shape a competitive market. The passage of the Maryland Deregulation Act in 1999 created a dramatic moment of reinvention for BGE. It had been the parent and Constellation the child; now it became the child and Constellation the parent. The Maryland PSC mandated that generating plants had to be spun off and rates for consumers were fixed for seven years. The Company now focused anew on its infrastructure and the efficient and safe delivery of energy. It remained a regulated utility while Constellation fully entered the world of energy market trading. BGE, as an entity, would never be the same company again. The difference in the missions of the two companies was so profound that leadership seriously investigated completely splitting into two separate companies in 2001. After a year, leadership concluded that the competitive risk of trading energy as a commodity could create financial instability while the strong steady mission of BGE would provide ballast for its enterprise. The companies needed each other, as the 2008 financial crisis strongly proved. BGE began to craft its new future as a solely regulated delivery system.

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Heat and Light, two of the four friezes of Lexington Ladies that adorn the former BG&E headquarters built in 1916.

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Competition takes hold again Constellation realized that power trading in a competitive marketplace required the skill of bankers. For decades, engineers stepped into company leadership, but new skills were required. Constellation formed an alliance with Goldman Sachs in 2001 and set about learning a new business under the leadership of banker Mayo Shattuck III. The entire drive of the 19th and 20th centuries was to merge smaller companies that delivered gas and electricity into a single regulated vertical structure. The shackles were now off and a range of new companies, both large and small, competed to sell energy through Constellation and directly to the customer. The many had once become one, and now the one had spawned the many. BGE kept full control of its massive infrastructure, which in 2014 was 7300 miles of natural gas pipes and 26,600 miles of power wires, now worth $6.597 billion. It set about its mission of delivering safe and reliable energy and building community and customer relations. Reliability and service moved to the center of BGE’s activities. Reliability could be measured, customers could be engaged. Over the first decade of the 21st century, the BGE culture shifted dramatically to focus on service. No longer was the principal focus limited to the efficient operations of the Company. The customers, including all of the employees, were at the center of the changed Company. Deregulation at the national level, spawned a range of smaller companies. Telephone and media services seem to have benefited from the newly competitive environment. In other industries, however, the expanded nationwide companies often acquired majority positions. Banks lost their local base as national banks bought smaller ones. Airline companies merged rather than proliferate. Utilities combined to build larger vertically integrated companies In 2012, Exelon merged both BGE and Constellation Energy into a larger company. Exelon offered economies

of scale, financial strength, operational excellence, and the opportunity to pool resources, particularly during natural disasters. For the public, suspicious of size, it again raised the specter of an unregulated utility inside a competitive environment.

BGE is still the face of energy for the customer The old BG&E model called for revenues to rise or fall based on how much energy was used. After deregulation, the rates of delivery were now “decoupled” from consumption. The company, BGE, was now semiindependent of the usage of its customers. Even with a choice of suppliers for energy sources, BGE holds the key relationship with the Central Maryland community. It delivers the message, sends the bills, encourages efficiency, and provides the visible services. The trucks on the street are BGE. Customers are urged to use less energy, motivatd by seeing their efforts reflected in lower bills and an increase in energy conservation. Customers now pay for energy at varying market rates, but pay standardized rates to BGE based on delivery. The entire financial model of the company underwent a sea change. Competition is playing a newly vital role in the utility industry but BGE has become the model of a customer-oriented company. The historic tension between competition and monopoly, both as avenues to create fairness for the customer, has come full circle. In 200 years, the effect of deregulation is the single most profound change for BGE.

“The first ten years of the 21st century were the most challenging of the Company’s history. Deregulation removed BGE from making market-driven decisions, but it still had to work with many regulatory bodies. Ultimately it had a transformation to become customer-focused and consumer-friendly.” — Mayo Shattuck, Chairman of the Board, Exelon Corporation

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Chapter 13

Innovation and Efficiency “I came to this company because it was open to and actively promoted new ideas. I like change and I like promoting it.”

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— Stephen Woerner, President and Chief Operating Officer, BGE


Opposite: “Use electric trucks� proclaims an early Company vehicle. Fully electric cars appeared almost a century later. Computers in trucks now provide speedy communication to crews in the field.

From the beginning innovation was the primary driver of the energy business. A new invention opened the door for an entrepreneur to create a business advantage. Rembrandt Peale understood the imaginative power of gaslight. His onlookers saw its business potential. The City of Baltimore grasped the importance of lighted streets. The Gas Light Company of Baltimiore was born. The changes stemming from the first introduction of gaslight came primarily from individual inventors. Coal gas became water carbureted gas. Meters could measure usage for both gas and electricity. The process of manufacturing gas went through several phases, each discovery making the operation and the buildings to house it larger and larger. The delivery system required pipes, first wood and then cast iron. By 1855, Spring Gardens was the largest U.S. manufacturer of gas and continued to produce until the subsequent shifts to natural gas in 1950 and liquefied natural gas in 1971. Gas led to stoves for heating and cooking, water heaters, and a range of appliances that were barely imagined at the beginning. The discovery of electricity and its commercial possibilities in 1881 was the most wide-reaching

innovation in the history of energy. Several small companies could generate power within a geographical region. Initially, electricity meant putting wires up on poles. Once companies started combining, the distribution system became more sophisticated to move electricity across greater distances. Large

A programmable thermostat allows a residential customer to manage individual home environments.

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Smart meters are perhaps the most important energy innovation in the 21st century.

generating plants required larger transmission lines and transmission substations able to step power down for residential usage. The technology of distribution favored a single strong company maintaining a large infrastructure to generate and deliver electricity across a wide area. Reliable power was the result of bigger and better delivery systems. When electricity entered the field, gas found itself at a disadvantage. It could not provide the same quality of street and interior lighting. Gas companies puzzled over how to compete in a field where they were clearly at a disadvantage. Slowly, however, inventors and entrepreneurs exploited heating as a new use for gas. The gas stove, first offered for sale in 1887, did not excite the buying public until 1910. Women could be freed from the tyranny of tending to a dirty coal stove and the gas company was able to move in a new direction. The 20th century saw more changes, not only in hardware, but in processes, customer service, vehicles, and infrastructure. The manufacture of gas became more sophisticated and long-distance pipes carried it from as far away as Texas. Giant holding tanks, built in 1903–10,

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provided better storage, so gas was always in the pipe. Natural gas replaced manufactured gas with a significant improvement in quality. The development of liquid natural gas also totally revised the storage infrastructure. The growth of Baltimore City and its suburbs demanded a wider and larger delivery infrastructure, necessitating new technology for maintenance and repair. Innovation in generating plants reduced some emissions, added smokestack scrubbers, and led to the building of the nuclear energy plants at Calvert Cliffs. The most important innovations within BG&E came with the digital age. In 1987, there were two computers and one printer available for a staff of 30 engineers. Once computers were accessible to all, they escalated design work and planning. Soon after, the Internet greatly expanded communication and interaction with customers. Deregulation created a new identity for BGE. The single focus on delivery of energy spawned a new wave of changes. Mobile data terminals were installed in trucks, placing the entire feeder book on line and detailing information about every pole and every repair. Crews could get their assignments from the computers in the cab. Meters could be read from a passing vehicle, and the friendly meter reader became a thing of the past. A capacitor, placed on an outside pole, can control voltage used by a household. Lowering voltage can reduce energy consumption without asking the consumer to do anything. BGE is one of the first utilities to deploy this technology where line capacitors control voltage. Automated distribution devices offer remote control of devices in the field. Automated switches with sensors know what to do next when a fault interrupts service. Thermal imaging, done from a service vehicle, makes it possible to actually see when wires are in danger of failure. More effective maintenance reduces emergency repairs. Electric vehicles are also front and center in the 21st century. The most significant recent innovation involves smart meters, invented as long ago as 1970. To make them practical, a sophisticated communication grid was developed in the late 1990s. BGE has made a major investment in this innovation. Beginning in 2012, smart meters were installed for 1.2 million customers, creating


Thermal imaging allows crews to identify potential line weaknesses before outages occur.

real time monitoring of efficient use for both the Company and customers. Individuals can use this knowledge to manage their own particular usage and take advantage of Smart Energy Rewards and Peak Rewards plans. Smart thermostats let customers manage their own energy use during each day, which results in lower energy costs for the customers.

Innovation is not just about equipment. Employees are consistently encouraged and rewarded to come up with new ideas both with tools and processes. A culture of efficiency and innovation is the hallmark of Company management. Employees continue to be valued partners in moving forward.

A capacitor allows voltage reduction to homes, lower cost without lowering the power.

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Chapter 14

Distinctive Customer Service “A utility is a local brand. It operates as a home town company.”

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— Denis O’Brien, Chief Executive Officer, Exelon Utilities


Opposite: The 1930s call center has evolved into home computers that can put customers in touch with BGE as never before. These well-dressed ladies were the friendly face of the Company as they sold appliances door to door in the 1920s.

A Civil War-era meter man trudges through Baltimore to fill wet gas meters. He is the earliest example of the only available customer service.

In 1816 distinctive customer service was a relative term, at best, since there was only one customer, the City of Baltimore. Without the contract to provide lighting for city streets, gaslight might have remained a parlor trick until the next big city wearied of crime in the darkness. In short order, however, the public perceived gas lighting to be a necessity. Company leaders struggled with financial and technical difficulties, specifically needing capital to lay additional pipes. Only an increase in customers would provide a hope of being profitable, and that is primarily how customers were viewed back then: as a source of revenues. It would take most of the next two centuries for customer relations to evolve into the complex partnership that it is today. By 1821, gross earnings were only $8,000 (about $165,000 in 2016 dollars) and there were only 73

customers, most of them stores, churches, and theaters. The expansion of customers was slow. Flat gas rates provided no incentive to conserve, a situation customers initially thought to their advantage. Only institutions could afford unlimited gas, so expansion required a new approach. Meters, much hated at the beginning, allowed rates to correlate with usage, but meters demanded upkeep. If your meter was defective, you had to pay the average of your neighbors’ bills. Customer service started at this low base. The Company made the demands and the customer was lucky to have service at all. If the gas was cut off, the customer was grateful when it was restored. The quality of the gaslight varied widely as increased demand outstripped the Company’s production abilities. In 1850 Baltimore’s Mayor Jerome complained in The Sun that “evil and crime”

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Rough and ready “troublemen� were the face of Consolidated out in the neighborhoods in the 1920s.

had increased because of poor gas service. The clamor for better service created competition, which produced price wars, which eventually raised rates as competitors failed. The public received light but could never be sure when, how much, and what it would cost. By 1890, 95% of gas suppliers’ business was lighting. The Consolidated Gas Company of Baltimore discovered very slowly that it could market many more uses of gas. It had been fixed on competing in a familiar sphere, where it was destined to lose to the efficiency of electric light. Spearheaded by the inventive C.H. Dickey, who was elected to its board in 1900, the gas company set about promoting the sale of gas appliances including stoves, heaters, engines, and irons. Gas usage continued to grow. By 1889, there were 37,000 customers and 439 miles of gas mains. By 1898, 47,345 customers produced a miniscule increase in revenue, but by 1901 some 51,033 customers increased sales by 10%. A small army of sales men and women was soon employed to convince women that gas would

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release them from the hot torments of a coal stove. It also, incidentally, secured the future of the Company. Bills with advertising for the new appliances noted that the Company aimed to provide good service, meaning an adequate energy supply. The advent of electric power did not improve customer relations. Beginning in the 1880s, coal-fired boilers had to be stoked by firemen to keep the current flowing. Power supply was relatively steady throughout the day, but at 6 p.m. Company offices were closed. Firemen were left alone shoveling coal. They were supposed to answer the single telephone line, assuming they were not busy and heard the bell. A complaint by a customer over delay or interruption of service could elicit an impolitic suggestion from the fireman that the customer could go someplace warmer than his retort. The supervisor of an overloaded station might cut off service in one area for a few hours, shifting the outage to another area at will. Unlike price, reliability was not yet seen as a customer issue.


The introduction of electric meters again aroused the public who wanted to pay flat rates. Meters were clumsy, records could easily be mixed up, and the Company was eager to make collections. It was not until well past 1900 that meters could provide regular bills based on actual usage. Accurate meters required meter readers, as customers were obligated to give them access. No longer did gruff mechanics come around, but friendly and reliable employees were often given the keys to houses. More customers meant capital to invest in generation and delivery. Those customers who could afford gas and electric service were the target market for modern appliances. By the 1890s messages to consumers became more friendly and helpful, with formal expressions of thanks. If you want information, they were told, notify the Company and “you will receive prompt and courteous attention. If it is not convenient for you to call at the office, telephone or send a postal.� Initially companies were regarded as private property and the public should have no hold on them even if their product was for public use. But public utilities began to see that it was good business practice to cultivate

relations with the public; hence the emphasis on the sale of new appliances to vary power usage. The first General Services Department was created in 1935. It supervised a Department of Customer Accounts that took care of various customer functions, such as reading meters, billing, and bookkeeping. It established a telephone services board in 1936, staffed by 24 men operating around the clock. The new telephone service, however, signaled that customers might have issues meriting a formal complaint structure and tracking. Gone was the suggestion that they just drop by. The process of billing was clearly governed by available technology. Bills were written out by hand for almost 100 years, as were the hand-tallied meter readings. Customers had to pay bills in person, either at Company offices or a designated bank. By the end of World War I, a punch card system of billing was introduced and the telephone call center was expanded. In the mid 1970s, large cumbersome computers took over billing, and the complaint department had expanded. For much of the late 20th century, the Company set its own standards for efficiency and effectiveness. If those systems benefited the customer, that was a good but

Today’s electric field personnel carry this special equipment designed to the highest safety standards. Compare this equipment to that of the earlier troublemen.

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secondary outcome. Tree cutters decided when and where trees should be trimmed. The Company decided what late bill penalties to charge, not regulators. Customers who questioned bills or procedures had to wait for answers.

Meter readers were often trusted with house keys and were always “here to help” until they were replaced by automated reading devices.

BGE crews are available to meet customer needs 24 hours a day.

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A utility’s primary job was to keep the power moving, not hold customers’ hands. Beyond those employees who interacted with the public, it wasn’t until the arrival of CEOs like Bernard Trueschler in the 1980s that Company strategy focused on providing good relations to all customers. Before then major commercial industries received the most attention, not residential customers. The one point of consistent face-to-face contact was the monthly meter reader who visited each household. The watchword was that they “were there to help,” and they sampled homemade snacks and listened to a range of issues and complaints. Camillus Wilson was the first African American meter reader, employed in 1952 and retired in 1994 with 41 years of service. The readers’ interpersonal skills were unique in a Company that relied extensively on engineers and physical labor. As with generation and delivery, the advent of technology made distinctive customer relations possible. Customers always have had two major areas of expectation: price and reliability. An interaction with the Company was usually negative: disruption of service or a billing question. The advent of electricity restructuring in 2000 brought long-range consequences for customers.


Emergency Operations receives information from customer calls and a computerized system that can pinpoint faults. Crews can then be directed to address the problem.

If BGE was now only the offspring of Constellation, delivering power through pipes and wires, it still was the public face of energy to all. A customer might purchase energy through BGE, Constellation, or one of 20 other competitors, but only BGE was visually identified with the service. Deregulation brought a legislatively imposed rate freeze for seven years, ending in 2007. The assumption was that energy costs would remain stable during the freeze period, giving competition enough time to step in and reduce rates. Energy, however, was now a commodity traded on the open market and the costs during the freeze were rising, a financial hit that BGE had to absorb. In 2005, Hurricane Katrina sharply drove up the cost and need for energy. Other utilities in Maryland were subject to this rate freeze, but they were able to phase in rate increases. BGE announced a shocker of a 72% increase, catching the public by surprise. The assumption was that customers would know they had received a good deal for the previous seven years and had planned accordingly. Understandably, this was a low point of customer relations that clouded the Company’s image for the next five years.

BGE increasingly began to offer itself as a trusted energy partner by providing useful information and advice for customers, typically in the monthly bills. They included safety tips and conservation measures, such as installing better insulation, purchasing energy saving appliances, and turning down or programming the thermostat. The goal was to create an energy-saving mentality in customers, and help them share in the effort to reduce bills by learning how to use less of the product. Beginning in 2012, BGE introduced the first Smart Energy Rewards program, allowing customers to earn bill credits on designated days by voluntarily reducing energy use. The Company now had a new positive way to interact with customers. No longer was the connection only about a negative event, an outage, or a large bill. Customers could become partners through environmental awareness and energy savings. Technological change created new possibilities for customer engagement. Smart meters had been developed several decades earlier but did not immediately replace analog meters. The key to using smart meters was building an effective communication grid connecting customers and the Company. Beginning as early as 2010, BGE and PECO in Philadelphia were

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among the first utilities to build a complete smart grid with all customers. It required a financing structure, a $200 million Department of Energy grant to BGE, and the development of a complete online communication system outside the regular cell phone structure. The public response to a new form of metering was similar to that in 1834 and 1888. Some suspected that a large company was altering the playing field in its favor. Legislation to ban or evade new meters was proposed. Some customers were alarmed that new meters might expose private information, interfere with household devices, or contribute to health risks. A small but vocal portion of the public was resistant to new technology, particularly when they perceived it was imposed by a large company. Regulators ultimately allowed customers to opt out of receiving smart meters, for a fee. Building the metering infrastructure took seven years. Installation of almost 2 million smart meters for residential customers and 25,000 larger wholesale customers began in 2012, concluding at the start of 2016. The smart meter provides immediate data both to the company and the customer, who now can monitor usage on smart phones or home computers. Customers have the tools to be full partners in cost balancing and environmental awareness. In fact, the Company cannot meet its 2020 renewable energy goals in Maryland without the cooperation and understanding of its consumers. The need to measure how customers felt about the Company grew. A handwritten summary of an internal survey in 1974 gives a clue to early customers’ thinking. BG&E got high marks for courtesy and helpfulness,

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BGE Customer Satisfaction Index Mean Score: 0 to 10 Scale

8.00

7.75

7.70 7.57 7.50

7.15

7.00 6.79

6.50

2011

2012

2013

2014

2015

The graph above shows a current customer satisfaction index for the years 2011 to 2015. It includes both residential and business customers who were asked by Market Strategies International (MSI) to respond to three questions on a scale of 1 to 10. • What is your overall satisfaction with BGE? • What are your overall feelings (favorability) about BGE? • Does BGE meet your expectations? Customer response shows a steady positive change, moving almost a full point upward by the fifth year. The ratings are measured against approximately 23 other utility companies, and the high rating in 2015 puts BGE into the top 25%, a rating it is determined to sustain and improve.

but fell short in providing community leadership and reasonable rates. In 1998 the rating firm J.D. Power and Associates approached BGE and some 20 other utility companies, most in the eastern United States, to undertake surveys of customer satisfaction. Cost and reliability, particularly the number and duration of outages, were accepted as industry standards of measurement for the first time. BGE now had an external handle on performance, using sophisticated survey materials to determine its effectiveness. The end of the rate freeze in 2007 had a dramatic effect on customer satisfaction ratings, with BGE dropping to the industry’s bottom quartile. J.D. Power predicted a five-year recovery time. By 2010 Company performance had improved substantially. Since beginning externally conducted customer satisfaction surveys, BGE has begun to monitor its performance in new ways. Outages, both in number and


duration, could be measured and customer response tracked, particularly after a major storm. In 2011 Hurricane Irene left 1 million people without power, some for as long as eight days. Customer satisfaction ratings dipped accordingly. If customers thought they were paying high rates, they expected quicker service. With smart meter information, trouble could be pinpointed and the extent of an outage predicted—and sometimes even prevented. Customers can now get accurate information on the duration and breadth of a difficulty. The value of the smart grid and other reliability improvements proved themselves with the Company’s fast response to outages during 2016’s winter storm. The merger of Constellation and Exelon in 2012 led to improved customer satisfaction ratings. The formal links with other utilities in the Exelon family meant that procedures and equipment became standardized and additional personnel quickly shifted into a storm zone, improving response rates. Uniform standards and disciplines used by Exelon also have increased perceptions of better service and allowed the Company to meet increasingly demanding regulatory performance standards. Technology also has helped improve many of the “back office” functions that customers may not see directly, but that provide benefits such as reduced billing errors, improved meter reading accuracy, and lower operating expenses that can put pressure on rates. BGE has learned from other tech savvy industries and now provides more detailed information to customers when and how they want it, including the Internet, email, mobile phone apps, and texting. The use of TV advertising, the increased explanation of the Smart Energy Rewards and Peak Rewards programs, offering home energy audits, and a consistent PR campaign keep a positive picture of BGE in front of its customers and influence ratings. Often simply knowing these programs are available is enough to make customers feel better about the Company, even if they don’t always participate. BGE is now firmly in the top quartile of customer satisfaction, an achievement within the last two years that has won commendation from the utility industry. Customer service is now truly distinctive. In the 19th century, customer relationships began with seeing the customer solely as the necessary source

of the cash to make a fledgling company grow. Once the wider public embraced the need for power in the home, the customer began to be better valued. As it moved toward serving 100% of the population, BGE developed best practices, the “BGE way,” often crafted by engineers to complete work successfully and safely, but not necessarily designed to enhance the customer relationship. Deregulation, the advent of digital technology, and BGE’s determination to be a positive neighbor in Central Maryland have completely changed the game. With tectonic changes beginning to rock the utility industry, such as distributed energy, net metering, home fuel cells, and the increased push toward renewable sources of energy, companies like BGE are preparing for a future when the utility-customer relationship will look very different. The customer is, and will remain, a valued partner in enhancing environmental awareness and moving smart energy forward.

BGE call center operators handle information, complaints, billing issues, and congratulations for good service.

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Chapter 15

Community

BGE and Central Maryland: More Than Half a Century of Philanthropic Partnership “I think of BGE as a “first responder” to Baltimore’s needs. Company leadership and employee volunteers lead the way. Giving is in BGE’s DNA.”

— Mark Furst, Chief Executive Officer, United Way of Central Maryland

CEO Calvin Butler chaired the Heart Walk in 2014. Here he leads the walkers on the route. 126


BGE’s contributions to many charities in the Central Maryland region have a long history. As a founding member of United Way in 1969, it has consistently provided philanthropic support and individual leadership, often as the top donor. It is now a leading business supporting the United Way, but, 20 years ago, BGE was joined by several other leading corporate supporters— Union Trust Bank, Mercantile Bank, Black and Decker, Bethlehem Steel—forging strong corporate links to local charities. Many of these once-prominent companies no longer have Baltimore-based corporate headquarters. The advent of interstate banking meant that local banks were soon bought by larger out-of-state institutions and the home offices faded from the Baltimore scene. BGE stands out as the single largest, longest, and steadiest giver to the United Way of Central Maryland region. Calvin Butler, BGE CEO, is one of a small number of remaining CEOs with a major community role here and he has no hesitancy in promoting a strong BGE public and neighborly presence. As part of the BGE bicentennial year, Butler is taking on the leadership role as United Way of Central Maryland’s Campaign Chair. In 2014, BGE provided more than $3.7 million in donations to nearly 300 non-profit charities in Central Maryland. In 2015, more than $4.5 million was awarded, taking BGE into the lead as one of the top givers in the region. Its sister company, Constellation, also provided $2 million. During the years following deregulation, when BGE was under the leadership of Constellation Energy, all of BGE’s charitable work was subsumed under the Constellation banner. Its generosity was as strong as ever but it no longer had its strong local brand. The 2012 merger with Exelon allowed BGE to regain its own identifiable giving program, cementing the relationship between the Baltimore region and its local utility.

Key programs spearheaded by BGE The United Way’s 211 program provides a 24-hour hotline, offering immediate assistance to anyone in the Central Maryland area struggling to make ends meet. One call to an easy-to-remember number will provide access to a social service manager, connecting to a network of more than 4600 assistance agencies. United Way operates the help desk for the program, fielding phone requests

daily. The 211 program handles more than 100,000 calls a year, addressing issues such as housing, family stability, food insecurity, and health care assistance. United Way provides energy bars wrapped in a 211 information card that can be handed to a needy individual on the street. Since 2006, over 41 states have adopted the 211 system. In this bicentennial year, one of BGE’s most important initiatives is the creation of a BGE youth ballpark in West Baltimore. Partnering with the Cal Ripken Sr. Foundation and with the Baltimore police as mentors, BGE will take the lead in building a recreational park for all youngsters, using this facility as an opportunity for workforce development in Baltimore. BGE also announced another new initiative—Green Grants—opportunities for nonprofit organizations in the BGE service area to apply for support for programs that focus on conservation, education, energy efficiency, pollution prevention, and community engagement. Many charities in Central Maryland have worked with BGE to better lives. BGE is proud to be a sponsor to nearly 300 of them. Three key charities are featured here, exemplifying the work that BGE does in this region.

BGE employees serve others The employees of BGE have proven to be as generous as the company in giving both time and money. BGE encourages all employees to participate in volunteer activities, allowing them to take 16 hours with pay for this work. Employees who contribute ten or more hours of volunteer service are given up to $700 per year which they may direct to the charities of their choice. BGE employees have given over 25,000 hours in 2014 and regularly provide that level of service. BGE also encourages employees to participate in local non-profit boards, offering a board placement service for those who are interested. Employees fill more than 125 positions on local boards. BGE cares and urges its employees to show their individual care. BGE is rooted in the Central Maryland community and is continually adapting to the changing needs of its customers. Its chief value lies in the employees who represent BGE’s dedication every day as they serve customers. This long-term value embodies the commitment that BGE has for its neighbors, customers, and local partners.

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The Cal Ripken, Sr. Foundation

The Cal Ripken, Sr. Foundation (CRSF) is a national nonprofit that helps to build character and teach critical life lessons to disadvantaged young people living in America’s most distressed communities through baseball- and softball-themed programs. In 2015, it reached over one million at-risk children in 46 states including Washington, D.C. It used a signature crime prevention/mentoring program, Badges for Baseball, in conjunction with a core character education curriculum, Healthy Choices, Healthy Children to teach important life skills to disadvantaged youth. With the help of corporate and community-based partners, the foundation gives kids the tools to succeed on and off the playing field. Corporate partners like BGE believe and enhance the mission of CRSF by providing sponsorship and grant funding that helps support afterschool mentoring programs as well as a youth development park, Vi Ripken Field, in Harford County.

“Since 2013, BGE has supported multiple foundation events including our Annual Gala which benefits the young boys and girls in our youth development programs around the country and locally in Baltimore City and Harford County. BGE is an invested corporate partner. Its employees have given time and resources to large volunteer projects that include renovating a recreational center at one of our program partners at the Edgewood Boys & Girls Club. BGE has also donated grant funding to our Badges for Baseball program in Aberdeen, MD which helps hundreds of underserved kids year round. BGE’s contribution is comprehensive and impactful because it supports the work of the foundation with its time and money,” says Steve Salem, President of the Cal Ripken, Sr. Foundation.

Cal Ripken, Jr. pitches to youngsters at a BGE-sponsored ball park.

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Reginald F. Lewis Museum of Maryland African American History and Culture

BGE is pleased to sponsor the Annual African American Children’s Book Fair at the Reginald F. Lewis Museum. The goal of the Fair is to foster children’s literature for African Americans and other ethnicities. Just three out of one hundred children’s books published in 2013 were about African Americans, according to a study published by the Cooperative Children’s Book Center at the University of Wisconsin. BGE recognized this void and stepped forward to make the Fair possible since 2014. The festival now serves a growing number of children and families each year by delighting them with readings by award-winning African American authors, live performances, illustration workshops by African American illustrators, and more. There are more than 30 talks and workshops for the 700 children in attendance. Visitors can also purchase hard-to-find titles in the festival’s Book Village. The event is fun-filled and exposes children to books and images with characters and stories they can relate to. Because of sponsorship, the Fair was able to give away one book per child. Former museum executive director Skipp Sanders says, “It’s crucial to have books with role models that

reflect young readers. Otherwise, the risk becomes that our next generation grows up feeling invisible. It becomes that much harder for them to build a positive self-image at a critical time in development.” The event is the largest of its kind in Maryland and the Washington, D.C. metro area. Additional sponsors include Baltimore City Schools and the Enoch Pratt Free Library. BGE understands the role that literature plays in young lives, particularly ethnic groups in the City. The support of BGE also made it possible for the museum to host living legend Misty Copeland on the day that she became the first African American principal dancer for the American Ballet Theater in the company’s 75-year history. She came to meet young women at the museum and tell her story. Those who met her were thrilled with the experience.

Misty Copeland greets young women at the Reginald F. Lewis Musuem. (Photo courtesy Likisha Griffin)

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Habitat for Humanity of the Chesapeake

Habitat for Humanity of the Chesapeake (Habitat Chesapeake), founded in 1982, has built more than 700 homes, providing more than 1250 low-income adults and children with safe, decent, and affordable housing. Habitat Chesapeake is dedicated to eliminating substandard housing locally through constructing, rehabilitating, and preserving homes. For more than 10 years, BGE has been a consistent partner with Habitat Chesapeake, providing over $1 million in resources towards these new houses. Over the last three years, BGE volunteers have donated 724 volunteer hours in five communities in Baltimore City: Woodbourne-McCabe, Brooklyn, Pigtown, Orchard Ridge, east Baltimore’s McElderry Park and west Baltimore’s Sandtown. These volunteers have been tremendous in helping complete construction work and critical home repair in these communities so deserving families can call them home. With the support and guidance of BGE, Habitat Chesapeake now consistently builds to Energy Star 3.0 certified standards for every home. This means homes

include Energy Star appliances, thermal bridging, ductwork, air sealing, special roofing, and subsequent certification testing. New home owners are reaping the rewards of energy cost savings and using this extra income to complete basic home repairs and enroll their children in extracurricular activities. BGE has helped support these standards at a cost of an additional $5,000–10,000 to bring the homes up to code. As part of BGE’s long-standing policy of corporate responsibility, it has partnered with Habitat Chesapeake to help build hundreds of energy-efficient homes for low-income families in Baltimore City. They support Habitat Chesapeake’s mission of bringing decent and affordable housing to families seeking homeownership. This commitment to inner city Baltimore is one of the key components of BGE’s corporate philanthropy.

BGE employees volunteer for construction jobs with Habitat.

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Three BGE employees are outstanding examples of the volunteering that has made BGE legendary in supporting its employees.

Barbara Palmer and the American Cancer Society

Barbara Palmer, Account Representative and Property Manager Liaison, is a 40-year BGE veteran who is a leading volunteer for the American Cancer Society’s annual walk, “Making Strides.” For several years, Barbara volunteered on the registration desk for the Walk, and then in 2002 she was diagnosed with breast cancer herself. From that point on, she became a walker and an organizer. In 2010 she received a second diagnosis so she is now a double survivor and doubly active in helping and counseling other women. Every year, Barbara organizes a BGE group for the Walk, “Shaneera’s Team,” named for a friend and fellow cancer sufferer who is no longer with us. Members involved friends and family in raising funds, and in 2013 her team contributed $10,000 to the American Cancer Society. In addition, many other BGE employees participate in the Walk on other teams, bringing employee engagement to another level. Barbara is a dynamo in pink. She counsels other women one-on-one, and shaves her head when she goes to meet someone in chemotherapy just to make them more comfortable. She runs a weekly Women’s Empowerment Service. Her main way of engaging women who are encountering new and difficult territory is her vivacious sense of humor. The annual “Making Strides Against Breast Cancer” draws walkers including many BGE employees.

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Cathy Schreiner and the Kennedy Krieger Institute

Cathy Schreiner, a 33-year BGE employee, is currently a Senior Business Analyst with Fleet Services in Woodlawn. In addition to her work at BGE, for the past 25 years she has filled the crucial role of Volunteer Chair at Kennedy Krieger Institute’s Festival of Trees. In this role, Cathy recruits and schedules more than 650 community volunteers who assist in everything from holiday decorating prior to the event, to running a carnival game during the event, and wrapping trees after the event. Kennedy Krieger Institute’s Festival of Trees is the largest holiday event of its kind on the East Coast, and serves as the unofficial holiday kick-off for children and families. The focal point of the event is the display and sale of more than 700 spectacular holiday trees, wreaths, and gingerbread houses created by local designers, artists, florists, individuals, schools, and community groups. Additional attractions include live holiday entertainment, seasonal merchants, and a model train display. As an event sponsor, BGE decorates a tree, then purchases the tree back and donates it to a local charity. All trees are available for sale during the event, and over the course of three days Festival of Trees raises more

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than $1 million for the Institute. These funds are crucial to helping Kennedy Krieger provide services each year to more than 20,000 children, whose diagnoses include autism, cerebral palsy, Down syndrome, spina bifida, traumatic brain and spinal cord injuries, and a host of other disorders ranging from mild to severe. Since its inception in 1990, Festival of Trees has raised nearly $20 million to support these important programs. Established in 1937, Kennedy Krieger Institute is recognized as an international leader for its delivery of patient care, research and training, special education, and community programs that benefit children and young adults with disorders and injuries of the brain. Cathy is a top example of the kind of long-term loyalty that BGE employees have shown to local charities. Her commitment has provided structure and volunteer organization to help Kennedy Krieger’s Festival of Trees event run smoothly each year.

The annual Kennedy Krieger Festival of Trees draws families from across Maryland.


Al Chesnavage and Catholic Charities Al Chesnavage, Principal Business Analyst with 20 years with BGE, is captain of a Dragon Boat that competes in the Catholic Charities biennial dragon boat races in the Inner Harbor. The races are the primary fundraising activity for Catholic Charities, the charity family of 80 different programs under the Baltimore Archdiocese. More than 30 sponsors have a participating boat and Al has led the BGE boat since the race’s inception some 20 years ago. He may in fact be the oldest, but is clearly the most enthusiastic of all the racers. Each boat has a crew of 22, with 20 paddlers, a stroke caller and a steerer. Eight of the paddlers must be women, so balancing the boat for action is a critical activity. Al’s team is made up of BGE employees who have proved to be competitive in these tense races. Race weekend is every other year on the Saturday before Labor Day, and the races are across the Inner Harbor. A winning time can be less than 90 seconds so these races are deeply competitive. All paddlers must work together. Overall the weekend can yield as much as $650,000 to $700,000. BGE is a platinum sponsor, bringing in $50,000 at the top donor level. Each company boat has a selected program within Catholic Charities that receives direct support for this race. My Sister’s Place, a day shelter for women, is linked with the BGE crew. In addition to raising funds through the race, the paddlers also spend time at My Sister’s Place, providing in-kind services and getting to know the clients.

Al Chesnavage is a stalwart in making these races a success. Dragon boats need time to practice and he is instrumental in working with the boats throughout the season. The staff at Catholic Charities are so grateful for his leadership and enthusiasm. They cannot say enough nice things about how much he has helped. Bravo, Al.

Dragon boat races in full competition.

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Chapter 16

BGE Charting a Bright Future “We are in a journey with our customers. We continue to evolve as their demands change and grow. Staying ahead of customers’ needs is our plan as we lead into the future.”

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— Calvin Butler, Chief Executive Officer, BGE


The utility with a single focus, has come full circle. In its most contemporary form, BGE, on the one hand, is a regulated utility serving an historic community and surrounding counties. On the other, it is embedded in a larger vertical energy business, Exelon, with a fleet of generating plants and sister utility companies. It is bigger than it once was because of its place in the Exelon family. At the same time, it is smaller than it once was, pruning its focus to the technological efficiency of reliable transmission and distribution. In 2012 BGE became part of Exelon. The Exelon partnership represents only 2% of BGE’s 200-year history, but the changes have not been modest. BGE is now part of an even larger company, based in Chicago. and is allied to two other Exelon utilities, COMED of Chicago and PECO of Philadelphia, and most recently the acquisition of PEPCO Holdings which consists of three utilities: Pepco in the District of Columbia, Delmarva Power–Delaware/ Maryland, and Atlantic City Electric. BGE is a company of pipes and wires, and also of innovation, insight, resources, and a rapidly changing infrastructure. It is at the top of its game. BGE has come

to embrace the importance of caring for the environment inside the framework of providing efficient energy. BGE has become a vocal champion for diversity in Central Maryland with a goal of not just mirroring its home community, but improving it. Much has changed in 200 years, but three constants remain:

• BGE is rooted in Central Maryland, a partner and

neighbor to the region it has always served. BGE is composed of loyal, talented employees who take enormous pride in their work and their Company. With the need for energy in today’s world as a constant, BGE is first in line to join with customers to use that energy wisely.

• •

The tools for creating efficient and reliable smart energy have been developed through digital technology. Since utilities encourage users to purchase less of their product, they must then work with customers as partners to make energy savings and energy efficiency a reality. It won’t happen without available tools for both parties. BGE is finding ways to innovate how customers use energy. New technology lowers the voltage that comes

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into a customer’s residence while the energy is not reduced. The Company also provides tools that encourage the customer to manage their usage closely and thereby save money. The smart meter is the key device, now installed throughout the service area. Smart meters allow the customer to monitor energy usage by the day or the hour so they can better understand their household trends and make the small changes that will lower their bills. Through the Smart Energy Rewards program, customers can voluntarily reduce their use of electricity on selected days. With the Peak Rewards program, customers have the option to sign up for automatic reductions on selected extremely hot summer days. BGE also facilitates customer savings through subsidized home efficiency audits, the installation of programmable thermostats, the use of LED light bulbs, and the purchase of Energy Star appliances. The wide array of choices, saving real cash with technical solutions, contributes to creating a solid partnership with the customer. The EmPOWER Maryland legislation has called for at least 20% of Maryland’s energy usage to come from renewable sources by 2020. The mandate moves Maryland in a positive direction, but the actual responsibility for meeting that target falls on utility companies and through them, upon the customer. All the tools available for everyday use not only

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save money, but also help the community move towards a more sustainable system. The customer, perhaps unwittingly, takes actual steps toward environmental responsibility. BGE provides Marylanders with many new ways to make real changes. In the largest possible sense, only increased efficiency will sustain the utility industry as profitable, while it must maintain and update an aging and complex infrastructure. The load growth of the electric industry overall is projected to be less than one percent through 2040. Utilities are not going to sell more power. In the post WWII period, expansion of demand with the growing suburbs made a Golden Age for BGE. But without that expansion and the increased revenue it has produced, innovation and efficiency are the primary routes toward financial stability. Growth and change will come in other areas, including renewable energy sources. In 1820 the customer was the source of revenue that allowed growth to happen. The customer is now the source of reduced usage that will allow continued steadiness of the industry. Another circle has come around. The smart meters also benefit the Company in other ways. BGE, along with sister company PECO, are the leaders in analyzing the data from smart meters and the smart grid, measuring temperature and pressure across the system. Today’s tools can detect theft, enable


automated switching if a line goes down, repair some faults automatically, and review energy loss and changes for individual houses. These tools offer continuous improvement in service and make reliability possible. Being part of Exelon offers advantages of scale, particularly for the sister utility delivery companies. Size gives leverage to improvements and to cooperation. In disasters, emergency staff can travel between sites and service areas, as each partner has the same procedures and established drill. New programs, such a developing microgrids, are explored and techniques are replicated as each company produces them. The companies share best practices and measure performance against each other. A shared mission has helped improve performance across the board as the surveys of customer satisfaction indicate. BGE in particular has seen a record reduction in the number and duration of outages. Exelon has valued performance standards and practices that reach across all its companies. Its commitment to high environmental standards and its compliance with federal, state, and local regulations is put into practice by all its operating companies. It asks for uniform safety standards and efficiency practices which are carried out locally. Its belief in the inventive power of a diverse workforce is a hallmark of its hiring, training, and promotion. The entire workforce, top to bottom, is asked to contribute ideas about innovation and efficiency. Its

role as a leader in the communities where operations are located is company policy. BGE has not been in the energy generating business since deregulation in 2000. Exelon has a fleet of generating plants, so its standards in this area do influence local behavior and public perception. Exelon has made some serious choices about how a vertical utility company generates power. As long as 10 years ago, Exelon sold off its coal-burning power plants. Some plants in its fleet are powered by oil or natural gas, but nuclear plants generate 64% of its power. Over ten years, this shift has reduced its emissions by 45 %. Emissions are still an issue of great public importance and pilot programs involving wind and solar are under scrutiny. Since the advent of the Clean Air Act in 1970, the utility industry has come to understand and shoulder its responsibility in this area. As a leader Exelon is both thoughtful and aggressive in seeking positive social solutions. The industry and the nation are moving more effectively toward the possibility of sustainable energy. While Exelon’s home base is in Chicago, BGE is managed in Maryland by its CEO, Calvin Butler. Exelon wants each of its operations to be managed locally, rooted in the community where it began, rising or falling by its own reputation, financial stability, and individual performance. The importance of BGE’s long history in Maryland is a key factor in retaining the BGE presence, but there is more than that. As energy becomes more critical and increasingly provided by larger companies, maintaining a local presence becomes key. BGE touches us all and therefore must be a relevant part of this Maryland community. It must, through all its applications, be a “social good,” to quote Exelon CEO Chris Crane. Profit is needed in the business world, but it is not the most valued target in the local community. The role of energy must be a public good for all. BGE has long had traditions of community participation. Annually it supports more than 300 charitable programs, both large and small. It values arts, education, the environment, neighborhood development, and health and human services. It helps provide key resources for those in need, including emergency assistance and aims to understand and partner with many non-profits in the region. It is keenly aware of issues that are present in complex urban settings and its recruiting practices specifically provide training for those from underserved neighborhoods.

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Light City Baltimore 2016 welcomed 400,000 visitors over seven nights. A brightly illuminated Ferris wheel was one of 50 attractions along the BGE Walk around the Inner Harbor.

As a featured event during its 200th anniversary in 2016, BGE was the lead sponsor of the inaugural Light City Baltimore, a celebration of light, art, and innovation. The popular festival, chaired by BGE CEO Calvin Butler, spotlighted Baltimore’s promise at a time when the City could benefit from an inspiring lift. Exelon encourages all of its CEOs to sit on local boards and Calvin Butler has gladly taken up that challenge. In turn, BGE encourages all employees to volunteer their time and talents to a range of local charities, each selected by employees to match individual interests. The BGE policy for employee participation is an exemplary method for engaging the community. The merger between Exelon and Constellation has

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benefitted BGE. Customers are more engaged with more opportunities to save money and protect the environment. High standards of performance, particularly in natural disasters, are fully evident. Practices and procedures are standardized with the long-term goal of service. Baltimore and Maryland are fully partnered with a rooted, community-based utility that cares about the future of our lives together. BGE will remain the face of energy for its service area with the goal of being the trusted provider, no matter the source of the energy. The synergy of change has brought us all to this new technologically driven, socially responsible platform, looking forward to another 200 years of service with our neighbors.


“It is truly an honor to lead a company that has such a great history and bright future.” — Chris Crane, Chief Executive Officer, Exelon

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BGE 200 th ANNIVERSARY TIMELINE 140

1816

June 11 – Rembrandt Peale illuminates his Baltimore Museum with gaslight. June 13 – Peale and influential Baltimoreans form the Gas Light Company of Baltimore. June 17 – The City of Baltimore passes an ordinance creating the Gas Light Company of Baltimore.

1817

February 5 – The Maryland General Assembly passes act incorporating the Gas Light Company of Baltimore. February 7 – The first Baltimore gas streetlight is lit before an enthusiastic crowd.

1827

The Gas Light Company pays its first dividend to stockholders.

1834

The first gas meter is installed.

1855

Spring Gardens begins manufacturing gas.

1861

The Maryland Legislature charters a rival, the Peoples Gas Light Company.

1877

The Consumers Mutual Gas Light Company introduces water gas to Baltimore.

1880

Three rival companies—the Baltimore Gas Light, the Peoples Gas Light, and the Consumers Mutual Gas Light—merge to become the Consolidated Gas Company of Baltimore City.

1881

The Brush Electric Light Company and the United States Electric Light and Power Company compete to bring electricity to Baltimore.

1888

The Chesapeake Gas Light Company and the Equitable Gas Light Company merge with the Consolidated Gas Company of Baltimore City.

1904

The Great Baltimore Fire wipes out the electric power but gas service survives without interruption.

1906

The Consolidated Gas Electric Light and Power Company of Baltimore is formed totally integrating gas and electric service in the city. The Westport electric generating plant, one of the country’s largest, begins operations.

1910

The Maryland Public Service Commission (PSC) is created.


1916

Consolidated celebrates the 100th anniversary of gas service. The Lexington Street Building becomes Company headquarters.

1936

The Customer Service Telephone Board greatly increases service to customers.

1950

Consolidated converts manufactured gas to natural gas at Spring Gardens.

1955

Consolidated is renamed the Baltimore Gas and Electric Company (BG&E).

1957

Baltimore Mayor Thomas D’Alesandro extinguishes the City’s last gas streetlight.

1971

BG&E begins liquefying and storing natural gas at Spring Gardens. Oil-gas manufacturing ceases.

1975

Unit One of the Calvert Cliffs Nuclear Plant begins operation. Unit Two follows in 1977.

ca. 1985

BG&E creates a diversified holding company, Constellation Energy.

1993

BG&E becomes BGE.

2000

Deregulation creates a profound change in identity as BGE becomes solely a delivery company and Constellation Energy, a market trading company, becomes its parent. The Maryland PSC agrees to a seven year rate freeze as a part of deregulation.

2007

The rate freeze ends with a 72% increase in rates for customers.

2012

Constellation and BGE merge with Exelon Corporation. BGE becomes one of Exelon’s utility companies. BGE begins installing advanced or “smart” meters.

2014

BGE attains ratings in the top quartile of customer satisfaction.

2015

BGE completes installation of smart meters to all customers in the service region.

2016

BGE celebrates 200 years of moving smart energy forward.

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Acknowledgments We are especially grateful for the able and knowledgeable assistance we received from dozens of BGE, Constellation and Exelon employees. Everyone opened their doors and patiently answered our often ignorant questions about the utility business. Many, so loyal to BGE and its mission, shared their own research and collections of artifacts. Top level leadership was especially generous with their perspectives. Lynn Hrdlick and Valencia McClure deserve special mention for making so many arrangements and letting us investigate this story at our own pace and with our own approach. Many thanks to all of you. We were able to dip into past Baltimore Gas and Electric publications to fill out our story. Will Sulima gathered much information for us. Both Thomson King and John King put together complete company histories that helped at every turn. Anniversary exhibits, pamphlets and booklets, past and present, were particularly helpful. Photos not otherwise credited came from the extensive BGE collection. The Canton neighborhood office of marketing firm Weber Shandwick could not have been more helpful. They, along with our friends at Creative Media, opened up a treasure trove of historic images. We also thank the Imaging Research Center at UMBC for their pioneering work, “Visualizing 1816 Baltimore,� available online. Our own associates improved the book at every turn. Norm Watkins, our photographer, was always available and traveled all over the Baltimore region to get us good modern photos. Our historical illustrator, Richard Schlecht, proved again how talented he is at bringing history alive and Bob Pratt stepped up to make interesting charts out of dry statistics. Alex Castro, our talented designer, applied his own magic to make this a memorable publication. Finally, we thank our friends and colleagues at the Maryland Historical Society who partnered with BGE to make this book possible. Special praise goes to the staff at the Baltimore Museum of Industry: Anita Kassof, Jane Woltereck and Matt Shirko. The BMI gave us ready access to its official BGE archive and are continuing to catalogue and make available a vast collection. We highly recommend a visit to the BMI on Key Highway. You will find a collection and programs that go to the source of what makes Baltimore special.

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About the Authors Burton Kummerow is a public historian with more than 50 years experience in bringing history into the public realm. He has been a writer-producer at Maryland Public Television, director of Historic St. Mary’s City where he introduced living history programs, and director of the Civil War Museum of Medicine in Frederick. Most recently he has been president of the Maryland Historical Society during the celebrations of the 200th Anniversary of the Battle of Baltimore and the writing of the Star Spangled Banner. He is also president of Historyworks, Inc., an historical consultant business now almost 20 years old. This is his fifth book. Mary Blair holds a PhD in English and American Studies from Indiana University where she did her thesis on the role of money in the post-Civil War period. Much of her professional life was spent as a development officer for Johns Hopkins University and the London School of Economics. Burton and Mary reside in Ruxton.

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BGE 200th Anniversary Book  

BGE is celebrating our 200 year anniversary as the first gas utility in the U.S. Our customers and community have been partners with us in t...

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