Buying power

April 19, 2004

ELECTRICITY CUSTOMERS across the state are in for a shock. Beginning this summer, a 5-year-old freeze on prices begins to thaw for residential users in the Washington suburbs and on the Eastern Shore. Rates are estimated to rise as much as 35 percent.

Some state lawmakers had hoped to cushion the blow by allowing county and municipal governments to negotiate prices on behalf of residential customers so they could take advantage of their collective buying power in the newly deregulated electricity market.

Those efforts failed, though, in the final hours of the General Assembly session, in part because there wasn't enough citizen clamor for it to drown out the opposition of the utility companies.

That will likely change after rate caps are lifted this summer for Eastern Shore customers of Conectiv Power Delivery and residential customers of the Potomac Electric Power Co., and deregulation suddenly becomes a reality for them. The General Assembly should monitor their experience and be ready to craft some means to boost the buying power of homeowners before caps are lifted in 2006 on Central Maryland residential customers of Baltimore Gas and Electric.

By deregulating electricity in 2000, the legislature hoped to lower utility prices through greater competition. To advance that goal, the law allows customers to form buying groups through civic associations, trade associations and nonprofit organizations. Commercial customers have been particularly aggressive in banding together to negotiate bulk purchases.

But consumer advocates fear most residential customers will have to fend for themselves, perhaps confused by a dizzying array of appeals for their business, and without the clout that comes with numbers.

Legislation approved by the state Senate would have allowed county and municipal governments to serve as the negotiating and purchasing agents for their residents, but the House balked.

Utilities had complained that such a system would work to the disadvantage of commercial users - while, not incidentally, undermining their own revenues.

Patricia A. Smith, people's counsel of the Public Service Commission, whose predecessor was a champion of the idea, said she feared residential customers would get swept into purchasing groups without being aware of it.

Further, there was no support for the measure from local governments, which were not eager to take on a probably thankless job likely to make them the focus of protests over higher electricity bills.

But either way, there may be no place for local officials to hide when the protests hit. They should be leading the parade for individual consumer-oriented legislation next year.

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