Panel adopts plan for phased-in power rate increase

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BALTIMORE (AP) -- Baltimore Gas and Electric Co. customers will pay a 21 percent rate increase starting next month, with rates going up over the next two years, under a plan adopted yesterday by the state Public Service Commission.

The utility-regulating PSC decided to go back to a phased-in payment plan approved in March because a later plan put forth by Gov. Robert L. Ehrlich Jr. is now tied up in court.

The decision by the PSC to go with that earlier 21 percent plan -- instead of extending rate caps until the matter is settled -- means customers could pay 21 percent more next month, with rates going up during the next two years and 5 percent interest charged on the difference.

Customers would be automatically given the payment plan unless they choose to absorb the whole 72 percent at once, saving themselves the interest payments.

Rates are going up because they've been capped since 1999 deregulation, but rate caps were due to expire in central Maryland this summer.

Mr. Ehrlich's plan, which gave residential customers the option of a smaller increase this summer, is in limbo because the city of Baltimore sued over it, saying the PSC erred in approving it so quickly. The city asked the PSC yesterday to extend rate caps for now, or adopt a payment plan with no interest charges.

The governor criticized the city's lawsuit because he said it means customers won't get his more-favorable plan. He called the 21 percent plan approved in March "flawed."

"Regrettably, the city's lawsuit has put working families in a far worse position," Mr. Ehrlich, a Republican running for re-election, said yesterday. Baltimore Mayor Martin O'Malley is a Democrat running for governor.

The legislature's top Democrats -- House Speaker Michael E. Busch and Senate President Thomas V. Mike Miller Jr. -- released a statement yesterday saying that the PSC should have extended the rate caps instead of going with the 21 percent plan.

They also said the PSC should have immediate hearings on improving that March plan.

BGE, Maryland's largest utility, is under fire for the rate increase. The power supplier released financial data to lawmakers this week.

The numbers showed that BGE bought 70 percent of its power supply from Constellation Energy Group, which is BGE's parent company.