The Facts about the Maryland General Assembly’s Electric Rate Hike Plan

The plan, pushed by Senate President Mike Miller, is in effect.

Their Plan has no Consumer Choice:

• The General Assembly’s plan forces 1.1 million Baltimore Gas & Electric customers to take out loans on electricity costs for up to 10 years whether they want to or not.
• BGE customers have no choice to pay the full electric rate increase up front to avoid paying interest. When customers in the Washington metropolitan and Eastern Shore areas were given a choice, 98% of them chose NOT to enroll in a rate deferral plan. BGE customers deserved the same choice.
• Customers are forced to pay for electricity in year 2017 that they consumed in year 2007 whether they want to or not.
• Under the legislative plan there is no rate relief, simply a deferral for up to 10 years. Customers will still pay the full 72% increase or more beginning as early as June 1, 2007.
• The bill penalizes customers who move into the BGE service area in the next ten years by forcing them to pay charges even though they did not receive prior credits.

Their Plan Charges Customers Interest:

• The legislative plan lets BGE charge its customers $109 million in interest. Contrary to what lawmakers say, their plan states that, “an electric company shall recover, as an additional rate stabilization cost, the actual cost to the electric company of carrying the costs and expenses deferred as regulatory assets under the rate stabilization plan.”
• BGE is guaranteed to recover the deferred amount while the customer is forced to pay interest for 10 years.
• Their plan requires BGE to provide $220 million less in customer benefits than the Governor’s plan, which is why BGE supports the legislative plan.

Their Plan Favors Energy Companies over Customers:

• Under the legislature’s plan, utilities and electricity suppliers can enter into non-competitive contracts which will likely lead to higher prices for consumers. These sweetheart deals do not guarantee consumers will receive the lowest price.
• The legislature criticized the fact that Constellation provides 70% of BGE’s load under the current process, but under their plan Constellation could provide an even larger percentage.
• The bill authorizes the wholesale decapitation of the independent PSC, creating a destabilizing regulatory environment and discouraging potential competitors for the delivery of electricity who could drive prices down.