Apologizing to Maryland consumers about the Public Service Commission’s inability to legally do anything about the impending 50 percent BGE rate increase, Gov. Martin O’Malley conceded that the PSC’s decision to approve Baltimore Gas and Electric’s rate increase “falls short of my campaign promises.”

“That is little consolation to people on fixed incomes,” O’Malley said. “I, like the PSC and every Marylander and BGE customer, am deeply disappointed that [the PSC] could not undo in four months what four years of deregulation has done to Maryland. But the PSC has done the groundwork to lay out a road map for change, and that is what we plan to do.”

O’Malley said the high rate of return that Constellation Energy, BGE’s parent company, receives in profits troubled him. “BGE said they were not in the business to secure the best prices for consumers at market and that’s a problem,” he said.

PSC Chairman Steven Larsen said, “The PSC will issue an RFP (request for proposal) to study the impact of reregulating the utility industry. It is clear from these hearings that buying Maryland’s electricity on the wholesale market has not served Marylanders well.”

This story continues below
Advertisement

Larsen said the PSC would recommend to the governor that the state consider building a new generation plant dedicated to Maryland consumers and state-owned transmission lines. He also said they will study a portfolio-management approach to procuring energy for the state.

“Constellation Energy has benefited substantially from market conditions,” Larsen said. “We will begin examining whether its relationship with BGE impacted the manner in which BGE procured energy for Maryland.”

“Clearly the PSC has taken its mandate from the governor very seriously,” Constellation Energy spokesman Robert Gould said. “This is a very lengthy order and we will take the next few weeks to fully digest it.”

The rate increase takes effect June 1. Consumers have until June 30 to opt into a rate stabilization plan, which would have them paying 38 percent of the rate increase now, then going to full market prices January 2008. In April, an additional $6 per month would be added to the bill for the delay to full-market rates through the RSP.

Larsen said the PSC will also be ask the governor to increase funding to the state’s Electric Universal Service Program that helps low-income families pay their utility bills.

“There is not enough money in the EUSP to help families with the pending increase,” he said.

rchappelle@baltimoreexaminer.com