Power to choose your own power

Deregulation: Consumer can compare rates, pick energy supplier under new state program.

May 05, 2000

MARYLAND consumers soon will have a choice about their electricity, one which could affect the price they pay.

But there is no need for panic or worry that power supplies will be interrupted. You don't have to do anything to benefit from the state's new electric deregulation law that goes into effect July 1.

The major impact of the law will be felt by industrial and bigger business consumers, which are more likely to seek new contracts with suppliers for cheaper power under the new system of energy competition. That will depend on their bargaining power as large consumers of electricity. A dozen "aggregators" are forming to bargain collectively for groups of smaller businesses.

For the 1 million residential power customers of Baltimore Gas and Electric Co., average bills should drop by about 6.5 percent and remain frozen (assuming the same amount of power used) for the next six years, under a deregulation agreement with the state.

BGE will buy power from supplier companies and sell it to consumers at the state-agreement price. So most home consumers will likely find it to their advantage not to choose a new supplier yet.

For all existing customers -- home and commercial -- BGE will continue to maintain the power lines, read the meters and (in most cases) send out the bills.

Customers can only choose their supplier of electricity, not their distributor. The supplier's charge for power is about half the monthly bill. Distribution charges and taxes make up the other half. A customer's distribution charges will be the same, regardless of the power supplier chosen.

The state's deregulation program has attracted 18 companies applying for licenses as power suppliers, signaling real competition.

Knowing that the existing power companies such as BGE and Potomac Electric Power Co. have agreed to fixed lower rates over the next several years, other suppliers will find it difficult to beat these residential rates.

But they may appeal to consumers with offers of other bundled services (such as appliance maintenance, cable and telephone access) or with offers to use less-polluting, renewable, "green" energy sources.

The state Public Service Commission has launched a campaign to inform consumers about deregulation and their chance to choose a power supplier. Monthly utility bills will include more information on the program, including the individual customer's average cost of electricity per kilowatt-hour (for making price comparisons).

Solicitations by power suppliers should begin to reach consumers later this spring, after the initial PSC information blitz. Consumers should read and compare competing offers carefully. They may decide to change nothing. But they will now have the power to choose their own power.

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