PSC backs electric choice

Reaffirmation answers broadside by People's Counsel

January 25, 2002|By Dan Thanh Dang | Dan Thanh Dang,SUN STAFF

The Maryland Public Service Commission reaffirmed its commitment yesterday to electric deregulation and customer choice - allowing residential customers to choose an alternative power supplier.

The PSC statement was a response to a Jan. 16 report from the Office of the People's Counsel that said 18 months of deregulation had produced little in the way of competition or new services.

Until there are options and clear consumer benefits, the OPC report recommended, the Maryland General Assembly should consider suspending electricity choice for the state's 1.8 million residential customers who could face higher prices when rate caps begin expiring in about two years.

Acknowledging that electric choice has been slow to develop in the state, state regulators said a competitive retail market will take time to develop.

"It is too soon to conclude anything about electric choice except that it has been slow to develop in much of Maryland," said PSC Chairman Catherine I. Riley, pointing to the Potomac Electric Power Co.'s service territory as the third-most-vibrant area of competition in the country.

More than 11 percent of residential customers in the Pepco area have selected an alternative power supplier, she said, adding, "This suggests that efforts to abandon choice for residential customers are, in fact, premature."

The OPC report also rankled two key state legislators, who last week rejected the OPC call to suspend deregulation. But Sen. Thomas L. Bromwell and Del. John A. Hurson, who chair Senate and House committees that oversee deregulation, said they would review the plan to ensure that the state's most vulnerable customers are protected.

Rate caps expire in the BGE territory in July 2006 and in July 2004 for other parts of the state. Once the rate caps are lifted, utilities - such as BGE - will no longer be required to supply power to residential customers who do not choose another supplier.

To protect residential customers, the General Assembly should consider requiring utilities to continue supplying power to residential customers even after price caps are lifted, the OPC report suggested.

"We're not advocating that we abandon customer choice right now," People's Counsel Michael J. Travieso said yesterday. "We're just suggesting that the facts indicate that we should be concerned and that until clear benefits are determined, we should be re-examining this thing."

While outside events such as the California power crisis, the Enron Corp. debacle and a federal effort to merge the country's electric grid has disrupted deregulation in Maryland and other states, the PSC will continue to provide oversight and regulate utilities while fostering competition, Riley said.

"If the commission, at an appropriate time in the near future, determines that retail competition is not developing properly, then the commission will make the necessary recommendations," she said.

"To talk of abandoning choice now for residential customers may well create a self-fulfilling prophecy. We think that unwise."

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