The Maryland Public Service Commission formally approved the 50 percent rate increase for Baltimore Gas and Electric residential customers effective June 1.

“We looked at it legally and unfortunately found no legal basis to disallow the rate hike,” PSC chairman Steven Larsen said. “BGE, in its procurement process, met the legal standards set out by the PSC. To defer it would have been to impose illegal, artificial rate caps.”

“Today’s decision paves the way for us to aggressively communicate to our customers what options they will have moving forward,” Constellation Energy Group spokesman Robert Gould said. “By tomorrow, customers can go to www.bge.com to review their options. Customers will also receive a letter within seven to 10 days outlining their options to enable them to make decisions that are most appropriate for them.”

BGE customers will see a 50 percent increase in their annual bills. Customers can choose to defer the rate increase until January 2008 and will experience a 38 percent rate increase, but they will have to pay the difference, without interest, beginning next year, in addition to full-market rates. Customers have until June 30, instead of May 31, to opt into the rate stabilization plan.

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“I am not surprised at PSC’s decision,” said Del. Jill Carter, a Baltimore City mayoral candidate. “Gov. [Martin] O’Malley’s changing of PSC members was like rearranging the deck chairs on the Titanic. This only reaffirms the need for the special legislative session I asked the governor to call in order to deal with this problem. The legislature created this problem in 1999, and it is incumbent upon us now, more than ever, to fix it.”

Carter, the Baltimore branch of the NAACP and the Maryland Coalition to Stop the BGE Rate Hike are holding a protest today outside Constellation Energy’s headquarters.

In a released statement, O’Malley said, “the PSC’s order makes clear the way energy has been purchased in Maryland has favored big utilities over consumers. Right now, there is no incentive for BGE to keep rates down. That must be changed.”

Larsen said the former PSC could have mitigated the rate shock with a more orderly entrance to market rates. Larsen also said that former PSC members allowed BGE to bid out 100 percent of Maryland’s energy requirements, which needlessly exposed consumers to market fluctuations and volatility. “Half of this increase is a result of ill-timed procurement at that time.”

rchappelle@baltimoreexaminer.com