Electric accord change sought

Six bills introduced on deregulation to expand protections

General Assembly

March 01, 2000|By Timothy B. Wheeler | Timothy B. Wheeler,SUN STAFF

With just four months to go before Marylanders have a chance to choose their power company, the General Assembly is being asked to tinker with the complex deal it worked out last year for opening the electric utility industry to competition.

A half-dozen bills have been introduced in Annapolis seeking to provide extra protections for residential customers and the environment when electricity is deregulated July 1.

Consumer advocates want lawmakers to let local governments buy power on behalf of their residents, supposedly at cheaper prices than homeowners could get on their own.

Environmentalists want at least a small percentage of the electricity sold in the state to come from renewable energy sources, such as solar generators.

And retailers such as Giant Food Inc. and municipalities such as Baltimore want the legislature to reverse a recent decision by the Public Service Commission over how much they should contribute to help the states poor pay their power bills. They contend that manufacturers, the heaviest users of electricity, will not be paying their fair share into the universal service fund.

The states electric utilities, already gearing up for the onset of competition, oppose any changes in the law adopted last year after their full-court press of the legislature.

Give choice a chance, says Mary Dempsey, a lobbyist for Constellation Energy Group Inc., parent of Baltimore Gas and Electric Co.

Legislative leaders seem prepared to do just that. Mindful of the two-year struggle it took to pass the restructuring law, the chairmen of the two committees that wrote it say they are in no mood to reopen last years debates.

Were not going to have the time and energy to go back in just because theyre not satisfied, said Del. Ronald A. Guns, Cecil County Democrat and chairman of the House Environmental Matters Committee.

Let's let it get operating before we start regulating something we havent deregulated yet, said Sen. Thomas L. Bromwell, Finance Committee chairman. The Baltimore County Democrat contended that Marylands restructuring law is a good one that has become a model for other states.

Not everyone agrees that the imminent relaxation of state regulations is going to benefit everyone.

We have one of the worst deregulation bills in the country in terms of taking care of consumers and the environment, contends Sen. Brian E. Frosh, a Montgomery County Democrat known for his environmental activism.

Frosh is a sponsor of a bill that would require at least 1 percent of the electricity sold to Maryland households by 2002 come from renewable energy, such as solar or wind. The amount would gradually increase to 6 percent by 2012 under a bill introduced by Sen. Arthur Dorman, a Prince Georges County Democrat.

Three bills also have been introducted that would lift restrictions imposed last year on local governments that want to act as aggregators, or middleman buyers of electricity. If municipalities could supply power to their residents, says Del. Leon G. Billings, a Montgomery Democrat, energy suppliers have to be careful about price increases.

But lawmakers have shown little inclination to give local governments the ability to form power-buying pools, and industries argue that mandating costly renewable energy could wipe out much of the savings that might result from competition.

Hearings are slated today on several deregulation bills. Given the complexity of the issues, warned Guns, the House environmental chairman, legislation will stand a chance only if there is consensus.

That certainly does not apply to a measure dealing with the $34 million fund set up to help the states poor pay their power bills. Manufacturers won, while retail store chains and governments lost when the Public Service Commission issued its order last month spelling out how the money will be collected from each of the states electricity customers.

Under the PSC order, the amount commercial and industrial customers are to pay into the universal service fund is based on how many electric meters they have.

Some of the smaller people felt they had been mistreated, said Sen. Nathaniel Exum, a Prince Georges Democrat who sponsored the bill. It would force the PSC to come up with a different collection formula.

Giant Food, with 80 supermarkets statewide and its corporate headquarters in Exums district, is one of the aggrieved parties. The grocery chain will have to pay $144,000 a year into the poor customers fund, said spokesman Barry Scher, while a factory with just one meter using as much or more electricity would pay only $42,000 a year.

Were simply looking for fairness, and this bill would do it, Scher said.

Michael Powell, a lawyer for 24 of BGEs larger industrial customers, defended the PSC ruling.

We didnt get what we wanted, either, he said. His clients will be paying anywhere from $20,000 to $120,000 into the fund, he noted, though he would not identify any by name.

Giant is not the only big loser on this issue.

Baltimore, with 181 schools on separate electric meters, will have to contribute $400,000 to $500,000 a year into the universal service fund, estimates Yolanda Winkler, deputy director of the citys legislative office.

Thats almost a penny on our property tax, Winkler said.

Reminded that city officials argued for establishing the universal service fund, Winkler acknowledged that Baltimore is home to half the states poor, who will be helped. We should pay something, she said, but we want it to be fair.

Bromwell said the aggrieved retailers and local governments should appeal to the PSC first, or go to court, before asking the legislature to sort out their dispute over the poor customers fund.

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