Lawmakers deride PSC utility plan Details 'insufficient' in orders to abolish electric monopolies

'You all missed the boat'

Timetable for start of Md. pilot program dismays legislators

December 04, 1997|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

State utility regulators ordered historic changes yesterday in the way Marylanders buy their electricity, but lawmakers blasted the effort as "incomplete and insufficient."

The Public Service Commission's plan would fully dismantle the century-old monopolistic electric supply system in the state by April 2001, allowing residents and businesses to purchase power from a variety of sources with the aim of lowering prices.

"I don't believe it's an understatement to say that this is one of the most, if not the most, important cases ever undertaken by this commission," PSC Chairman H. Russell Frisby Jr. said after unveiling the plan to a legislative task force in Annapolis. "We've found the evidence convincing that retail competition does offer various benefits."

In the counties that make up Central Maryland, Baltimore Gas and Electric Co. exclusively provides electricity to more than 1 million customers. Statewide, electricity is supplied by just a handful of companies, including Allegheny Power Co., Delmarva Power & Light and Potomac Electric Power Co.

But lawmakers and members of the task force, which since August has also been studying how to revamp Maryland's electric industry, chastised the PSC's 202-page order for failing to provide details about how competition and deregulation would occur.

"There's no specificity in this report," said Sen. Robert R. Neall, a Republican from Anne Arundel County and a member of the task force. "Maybe I'm missing something. But as it is, we don't have the information necessary to make public policy decisions to meet the deadlines you've imposed. This is incomplete and insufficient."

Neall complained that the PSC, which has been considering deregulation issues for more than two years, failed to make specific recommendations for tax changes that would be required under a restructured electric system.

He also chided the PSC for its timetable, since new laws would have to be passed during the four-month General Assembly session that begins next month.

Under the PSC order, Frisby said, a third of the state's residents would have the freedom to choose electricity suppliers as part of a pilot program in April 1999, a date that caused consternation among several lawmakers.

"Is it realistic that in the next 14 months we'll have freedom of choice for electricity?" Sen. Thomas L. Bromwell, a Baltimore County Democrat who co-chairs the task force and also chairs the powerful Senate Finance Committee, asked Frisby.

'Can't be wrong'

"We can't be wrong with this. We can't have consumers getting a bad deal," Bromwell added. "I'm not going to use the consuming public, one-third of the state's residents, wherever they may be, for something that might not work. So let's chat."

Frisby countered that restructuring the electric industry in Maryland involves complex issues, such as potentially obsolete power plants, consumer protection and billing changes. Moreover, the once-staid industry is undergoing vast changes nationwide that make it difficult to predict or plan for the future.

"What the market will look like in the future I can't say," Frisby said, adding that he could not predict when -- or if -- consumer prices would go down with competition. "But we recognize that this is a complex process that will require careful planning."

Systems 'fragile'

Other complexities surrounding moving from a regulated system to an unregulated one abound as well.

James Hunter, president of the International Brotherhood of Electrical Workers Local 1900, which represents Pepco employees and is fighting its proposed merger with BGE, warned that dependability and reliability of electric service could suffer in a competitive market that lacked checks and balances.

"These systems are very fragile," Hunter said, referring to power outages last summer in California, where deregulation and competition have been in place for some time.

Lawmakers appeared unimpressed with the PSC's work.

"You all missed the boat on helping us make some key decisions," Neall said. "Now I think we have a gun to our head, and that's unfair."

In past sessions, task force witnesses have cautioned that lawmakers need to address issues such as environmental protection, billing, potential job loss and what rights out-of-state power suppliers would have in a competitive market.

Price cap

And at least one lawmaker also warned that, without guarantees of lower prices, competition could hurt consumers rather than help them.

"Somebody is going to get screwed and you and I know who it is, and that's the residential retail consumer," said Del. Leon G. Billings, a Democrat from Montgomery County.

To address the specifics relating to deregulation and the introduction of competition, the PSC is planning a series of round tables, although Frisby did not provide details about the groups or who would be on the round tables.

The PSC also intends to establish an across-the-board price cap through 2001, to prevent electric companies from raising prices, its order stated.

Pub Date: 12/04/97

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