- The Washington Times - Friday, March 10, 2006

Maryland and Washington residents are preparing for steep hikes in their electricity bills while the companies supplying that power expect continued financial growth.

Constellation Energy Group, which owns Baltimore Gas and Electric Co., has seen its total revenues nearly double from $9.7 billion in 2003 to $17.1 billion last year. Net income rose from $540 million in 2004 to $623 million last year.

Constellation’s earnings per share were $3.62 last year and are expected to reach up to $5 per share in 2007, said spokeswoman Angelique Rewers.

Potomac Electric Power Co.’s parent, Pepco Holdings Inc., reported consolidated earnings of $258.7 million in 2004, or $1.47 per share, up from $113.5 million, or 66 cents per share, in 2003. The company’s 2005 earnings will be released next week.

Fuel costs for electric utilities rose by a record amount to $90 billion nationwide from $68 billion in 2004, according to Cambridge Energy Research Associates.

The local power companies said rate hikes of 12 to 72 percent for consumers, which still must be approved by the Public Service Commissions in Maryland and the District, represent the cost of the power they’re buying.

Analysts said that is true, but the industry also will reap the benefits.

“With higher oil and natural gas prices, nuclear and coal plants have a distinct competitive advantage,” said Paul Patterson, an analyst with Glenrock Associates LLC, a New York energy research firm. “Policy-makers should look for ways to enable and encourage development of such capacity.”

Douglas Brown, associate professor of economics at Georgetown University, encouraged consumers to get out of their SUVs to help ease the hit. Gas and energy bills have remained steady for the last 20 years, but “those days are over,” he said.

“Once oil took off, that has an impact,” Mr. Brown said. “Energy is substitutable and when the price of substitutes go up, the price of everything else goes up. It’s not that BGE and other companies are trying to zap their customers.”

Constellation Energy’s stock yesterday closed at $53.76, up $.18 on the New York Stock Exchange, while Pepco’s stock rose $.04 to $23.15.

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