Stalled supplier choice decried Group asks lawmakers to speed up planned electricity deregulation

'Pressing consumer issue'

Manufacturers, retailers, out-of-state utilities join effort


January 20, 1998|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

A coalition of businesses and power generators in favor of busting Maryland's monopolistic electric supply system urged lawmakers in Annapolis yesterday to speed up planned deregulation by two years.

Calling customer choice for electricity "the most pressing consumer issue in Maryland today," the Alliance for Customer Choice of Electrical Suppliers and Services (ACCESS) encouraged the state's General Assembly to pass laws that would promote full competition by July 2000.

"Our message is very simple: Deregulation and competition equal lower costs and create improved products and services," said Tom Saquella, president of the Maryland Retailers Association and a member of ACCESS.

The group also contends that deregulation by July 2000 would keep Maryland on pace with states like Pennsylvania and New York -- which are well on the road to consumer choice -- and promote economic development.

ACCESS' call to expedite deregulation marks the first time any consumer group has spoken out in response to a New Year's Eve order from state utilities regulators slowing the introduction of competition until July 2002.

Maryland's Public Service Commission decided to push the process back from its original April 2001 target date after lawmakers said they would not have enough time to enact tax and other legislation necessary for deregulation.

"We delayed deregulation after considering the serious issues raised by the [Office of People's Counsel] and because we were aware of the legislators' concerns that they would need to have more time," said H. Russell Frisby Jr., chairman of the PSC.

"We acted deliberately," he added. "I just don't think it's possible implement restructuring overnight."

ACCESS, a group made up of retail merchants such as Giant Food Inc., large manufacturers like aluminum maker Eastalco and out-of-state utilities such as Houston-based Enron Corp., says the PSC's action has "stalled" deregulation, and that delays until 2002 will "unfairly punish customers with higher energy rates."

Barry Scher, a Giant Food spokesman, said the grocery chain spends $28.5 million annually on power to operate its 105 Maryland stores, its second-largest corpo- rate expense behind labor.

"We know these costs can be significantly reduced with deregulation," Scher said.

ACCESS also challenged the PSC to eliminate "phasing in" consumer choice for Marylanders and to set limits on how much existing utilities can benefit from "stranded costs" such as obsolete power plants.

Lawmakers involved in the process said yesterday that, while the PSC-imposed delay may be necessary because electric restructuring is so complicated, it should not dismantle the effort.

"My concern is that we do it right so we don't have to do it over," said Sen. Robert R. Neall, the Anne Arundel County Republican who blasted the PSC over its original April 2001 deregulation schedule. "There's going to be a lot of confusion in California and Pennsylvania over the next year or so, and maybe we can learn from others' mistakes.

"But as a result of putting things off 15 months as the PSC has, it's moved not to the back burner, it's been taken off the stove. And we don't have the same incentive [to act quickly] as, say, New England, where energy costs are so out of line."

Neall said he hopes that lawmakers would pass a series of bills this session to allow deregulation, and that they would face tax and other issues in 1999.

Existing energy suppliers also objected to the call to push up deregulation, citing its complexity.

"It's unrealistic to advance the timetable even more than the PSC laid out originally," said Arthur J. Slusark, a Baltimore Gas and Electric Co. spokesman. "It flies in the face of logic."

Slusark also called ACCESS' proposals "self-centered."

"No one should have anything to fear from competition," Saquella said. "We need to push to get this back on track. Our concern is that this won't happen until 2002, 2003 or 2004 at this point."

Pub Date: 1/20/98

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.