- The Washington Times - Friday, March 6, 2009


Maryland lawmakers Thursday considered re-regulating the state’s utility companies, after an outpouring of complaints about soaring costs from customers - including more than 120,000 on the verge of having their electricity shut off next month.

“It sounds to me like this makes a pretty good case for re-regulation,” said Sen. Donald F. Munson, one of several Republicans who have joined the Democrat-controlled General Assembly on the issue.

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The proposal came as Douglas Nazarian, chairman of the Maryland Public Services Commission, told senators that if the problem is not resolved by April 1, when power cutoff restrictions end, the state will have a potential “tsunami” of residents living in the dark.

“April is going to be a disaster if we don´t start getting our arms and our brains wrapped around this issue,” he said.

According to a commission report, terminations increased 22 percent from October 2006 to fall 2008, and the number of customers who accumulated unpaid bills increased 36 percent.

Of particular concern to lawmakers and regulators is more than 84,000 delinquent Baltimore Gas & Electric Co. customers eligible for termination after April 1. About 43,000 Pepco customers in the D.C. area also are eligible.

Lawmakers and regulators said utility bills have double - and sometimes tripled - over the past few months.

They said, for example, a $400 monthly utility bill for a typical two-story house is now $800.

In 1999, the General Assembly passed deregulation legislation, signed by Gov. Parris N. Glendening, a Democrat, to encourage competition in the utility industry.

Rates stayed relatively stable until 2006, when regulations ended and BGE rates increased 72 percent. The Assembly intervened that summer, when Republican Robert L. Ehrlich Jr. was governor, to cap the rate increases. But customers had to pay the remainder of the 72 percent after the rate holiday ended in June 2007.

Gov. Martin O´Malley, a Democrat, favors re-regulation. He introduced legislation Monday that would give the commission greater authority to decide when power plants could be built and whether customers are paying fair rates.

“We cannot afford to tap our feet, stare at our watches and hope and pray that the market will somehow deliver on its promises,” he said.

Utility company executives said Thursday and at hearings last week that higher rates, a cold winter and increased consumption are the primary culprits for the higher bills.

L. Wayne Harbaugh of BGE said that new appliances, such as Xbox 360 consoles and plasma TV screens, can increase energy bills by several hundred dollars over the course of a year.

Sen. Nathaniel J. McFadden, Baltimore Democrat, said the doubling of energy bills from month to month must have been caused by more than just greater energy consumption.

“What do you say to my constituents, many of whom are seniors, who don´t have an Xbox, who don´t have a plasma, and they haven´t changed absolutely anything and their bills still double?” he asked.

The Electric Customer Choice and Competition Act of 1999 deregulated utility companies by requiring them to sell or transfer their power plants to a nonregulated business unit.

Mr. Nazarian said that rates would probably be lower if the deregulation law were not in effect today. “It´s fair to say that if the 1999 bill were not passed, rates would be lower,” he said.

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