- The Washington Times - Friday, January 18, 2002

BALTIMORE (AP) Electricity deregulation in Maryland has failed to produce competition or new services for residential customers since it began 18 months ago, according to a report by the People's Counsel.

The report was People's Counsel Michael Travieso's first examination of the state's effort to reform the electricity market. He recommended that until clear consumer benefits emerge, the General Assembly should consider suspending electricity choice for 1.8 million residential customers who could face higher costs without the prospects of alternative energy suppliers.

Mr. Travieso also said lawmakers should consider forcing state utilities to continue providing power to customers who have not switched to another supplier once price caps begin expiring in two years.

"We don't really see benefits in a state like Maryland, which had below-average prices to start with," said Mr. Travieso, the state's advocate for residential consumers in energy matters.

"There's so much instability in that sector. There's volatility in the wholesale price market," Mr. Travieso wrote. "There are changing federal rules. Enron Corp.'s collapse and the happenings in California. All sorts of things that didn't exist in 1999 when the deregulation statute was adopted."

In the 18 months since deregulation began, just 2.6 percent of Marylanders have switched to alternative energy providers and only one company is soliciting new residential customers, the report said.

In Baltimore Gas and Electric Co.'s service area, just 14 customers have switched.

The Maryland Public Service Commission declined to comment because it had not yet seen a copy of Mr. Travieso's report.

In the summer of 2000, residential electricity customers were given the ability to switch to alternative energy providers.

But to give the market time to develop, the law gave consumers protection through price freezes, rate caps and low-income assistance.

Little competition and volatility in the market, the report says, should require state utilities to continue serving as the provider of last resort once price caps are lifted in order to protect consumers from "the whims of the market."

The caps are set to expire in July 2006 for residential customers in the Baltimore area and in July 2004 for other parts of the state.

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