- The Washington Times - Friday, April 14, 2006

Several consumer groups are hoping the federal government can do something about Maryland’s looming electricity rate crisis and have filed a complaint with the Federal Energy Regulatory Commission.

“We’re asking for an investigation to determine whether the rates they are charging are illegal,” said Tyson Slocum, an energy specialist with Public Citizen, a public interest watchdog group based in the District.

The complaint asks the commission to stop a merger between Constellation Energy Group and Florida Power & Light Co.

Constellation’s subsidiary, Baltimore Gas & Electric Co. (BGE), is set to raise electricity rates for its 1.1 million residential customers by 72 percent July 1.

Public Citizen and six other groups are asking FERC to “require Constellation to provide all financial details of its power plant operations to determine whether or not the company is earning unjust and unreasonable windfall profits.”

A FERC spokeswoman declined to comment on the merits of the protest.

The Democrat-controlled state legislature failed to pass legislation that would have reduced the upcoming July increase to 15 percent and phase in further increases during 2007 and 2008.

Now, Gov. Robert L. Ehrlich Jr., a Republican, is working directly with executives from BGE and Constellation to try to reach a deal that will soften the blow to consumers.

Mr. Ehrlich met with House Speaker Michael E. Busch, a Democrat, yesterday to discuss the situation, and afterward Mr. Busch expressed hope that the rate increase could be held to 15 percent this year. BGE also would be allowed to charge a monthly fee to pay for phasing in the rate increases, Mr. Busch said.

Mr. Ehrlich’s administration has said it will hold meetings with energy executives this weekend and hopes to have a deal by early next week. Both he and Mr. Busch said they do not think a special session of the General Assembly is needed.

Constellation spokesman Robert Gould said electricity rates are rising because of “the hurricanes in the Gulf, as well as demand for coal in countries like India and China.”

“That and nothing else is driving the cost of electricity up,” Mr. Gould said. “BGE and Constellation Energy do not control the global energy marketplace. Any increase in price is being driven by global supply and demand.”

He also said BGE customers have not had a rate increase since 1993.

But Mr. Slocum, who is Public Citizen’s research director for energy issues, called Constellation’s talk of a market price “mythical” and said the complaint filed with FERC is as much a policy paper as it is a legal document.

“Most politicians still have no clue about electricity markets. They don’t understand it. This document is a step in trying to make them understand what’s at stake here, what’s wrong, what are the problems, and we outline some solutions,” Mr. Slocum said.

Maryland deregulated its electricity market in 1999, under Gov. Parris N. Glendening, a Democrat, and at the same time capped electricity rates, hoping that competitors would enter the market.

None did, and Public Citizen’s complaint argues that Maryland should re-regulate its electricity market to bring prices back under the state’s authority.

“This doesn’t mean that deregulation in our economy never works. It means that electricity is different from other things in the economy,” Mr. Slocum said.

This article is based in part on wire service reports.



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