8 trade groups will unite, seek cheaper power rates

Smaller firms prepare for July deregulation of electricity market

Utilities

January 07, 2000|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

Eight trade groups said yesterday that they will unite to negotiate cheaper power rates for their 6,000 member businesses once Maryland's electricity market opens to competition July 1.

Having one group doing the shopping allows owners of small to medium-size companies to focus on their business instead of making sometimes-complicated energy decisions, charter members of the Mid-Atlantic Aggregation Group Independent Consortium (MAAGIC) said at a news conference in downtown Baltimore yesterday.

Aggregation, or group purchasing, allows smaller customers to purchase electricity in bulk at a cheaper price and better terms than most customers can get on their own, members said.

"Residential customers will benefit initially from deregulation, but commercial customers have to scrape for savings," said Champe McCulloch, who represents the Maryland Hotel and Motel Association. "The little guy and little gal who are not part of MAAGIC really won't reap many benefits. In fact, they may be hurt by deregulation."

The group has hired Mondre Energy, a Philadelphia-based energy consulting firm, to evaluate and negotiate prices.

Roy Littlefield, executive director of the Washington-Maryland-Delaware Service Station and Automotive Repair Association, said many service stations are open 24 hours, and electric bills are a large portion of their expenses.

"It just seems like every legislative regulatory marketing trend is against small business, and we're always getting squeezed out," he said.

"This is one ray of hope for us to come together as a group."

Said Peter Stanford, of the Building Owners and Managers Association of Baltimore: "Electricity accounts for about one-third of the cost of operating a building. So, for our members, any saving in that arena will be very significant."

MAAGIC officials said they will soon seek a license for their organization from the Maryland Public Service Commission. MAAGIC is among the first aggregation groups to form in Maryland. No other group has sought an aggregator license, commission officials said.

"It's a neat development. I'm interested in seeing what kind of rates and discounts the group can get," said Glenn F. Ivey, PSC chairman.

"This could be used as a blueprint for other groups like churches."

Members of the group also include Maryland Retailers Association, Mid-Atlantic Food Dealers Association, Printing and Graphics Communications Association, Printing Industries of Maryland and the Restaurant Association of Maryland.

The groups paid up to $5,000 to join the aggregator.

Organizers are looking for other trade and business groups to join, and are in discussions with three other organizations, said Tom Saquella, president of the retailers association.

"Small businesses are not going to hire energy consultants," he said. "We're taking the guesswork out of deregulation."

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