A group of natural gas suppliers opposed parts of a proposed state bill yesterday that would add consumer protections to Maryland's deregulated gas market, saying the changes would require them to raise rates.
The legislation, proposed by Sen. Brian E. Frosh, would grant licensing authority for gas suppliers to the Maryland Public Service Commission, as well as the authority to enforce comprehensive consumer protections.
Gas-deregulation efforts in the state "are generally successful, but there's no clear legislative oversight," said Frosh, a Montgomery County Democrat. "There's no forum for consumers to voice their complaints."
Unlike the situation with electricity deregulation, which is set to start in July and will have suppliers licensed and monitored by the PSC, gas suppliers are authorized by utilities such as Baltimore Gas and Electric Co. and Washington Gas Light Co. to enter the Maryland market if they meet certain financial requirements.
Currently, it is not necessary for gas suppliers to be licensed in Maryland before signing up customers. Additionally, neither the PSC nor the attorney general's office has the authority to handle complaints.
The PSC reported 200 complaints about deceptive tactics used by gas marketers in their door-to-door solicitations of customers, said Michael J. Travieso, head of the state's Office of People's Counsel.
But Travieso added that the number could be a "gross understatement."
"We have a real potential problem with no protection and no regulation," he testified.
During a hearing before the state Senate Finance Committee yesterday, the PSC, the People's Counsel and BGE supported the bill. A House committee held a hearing on a similar bill Tuesday. Washington Gas, which has 350,000 gas customers in the Maryland suburbs near Washington, said it is in favor of the PSC licensing suppliers and of consumer protections, but expressed concern during the hearing that the protections would be too sweeping.
"If more than 200,000 customers are shopping for gas, and there are only 200 complaints, I don't see where customers are crying out for legislation," testified James B. Wagner of Washington Gas. Washington Gas said extensive regulation would increase gas rates and reduce supplier participation. The company offered an amendment to the legislation that would prevent the PSC from making blanket regulations for the gas market. Statoil Energy Services Inc. and Conectiv Energy, two companies that market natural gas in Maryland, testified that they support the amendment.
"The commission should determine where regulation is necessary and adopt it, instead of instituting blanket regulation," said Paul Buckley, an attorney for Washington Gas. The proposed legislation would allow the PSC to "impose unnecessary regulation that would result in unnecessary cost increases."
Travieso disputed that gas costs would rise if the legislation is enacted. "I represent the little guys," he said. "If bills go up, I have to take responsibility for that."