Power supply choice absent

Conectiv is only option in area after deregulation

Rates to increase 10.5 percent

July 04, 2004|By Patrick Tyler | Patrick Tyler,SUN STAFF

Some of the first residents in Maryland to have to choose an electricity provider were given only one option Thursday when energy regulation ended in Cecil and northeastern Harford counties.

"They are saying that we have a choice, but there is nothing to choose from," said Dawn Wooldridge of Colora, a customer of Conectiv. Its rates will increase 10.5 percent this month.

Conectiv, a power delivery company serving parts of Eastern Maryland, was fully deregulated Thursday in accordance with the federal Electric Customer Choice and Competition Act of 1999 that provides for "deregulating the generation, pricing, and supply of energy."

The bill granted customers the ability to choose an energy supplier as early as July 2001. But because of an statewide electric rate freeze, prices were low and third-party suppliers couldn't compete, so they didn't enter the market, according to Don Evelth of the Maryland Public Service Commission. Therefore, Evelth said, it could take time for the competitive market to develop in Maryland.

Rate freezes are being lifted according to a timetable set by the four major energy suppliersin the state - Pepco, Allegheny Power, Conectiv and Baltimore Gas and Electric.

The first industries allowed to choose a supplier were BGE's large commercial customers in July 2002, according to Wayne Harbaugh, a spokesman for BGE.

Conectiv and Pepco's customers are the first state residents to have such an option.

Though the Public Service Commission's Web site says, "There are over 30 licensed suppliers in the state of Maryland," most of those supply businesses, leaving no competitive residential suppliers for Conectiv customers.

Nobody's fault

Evelth said the lack of suppliers is no one's fault. "Suppliers are free to choose to enter the market, and as of now suppliers have chosen not to supply service," Evelth said.

Residents are then left with a Standard Offer Service, a program where the delivery company chooses a service provider for customers who do not, or in this case cannot, choose a third-party supplier.

According to Tim Brown, a spokesman for Conectiv, "[Conectiv] accepted bids on the wholesale energy market to get the best price for [those] customers."

Conectiv's 10.5 percent rate increase will translate into $9.85 per month for an average customer, according to a letter sent by Conectiv to its Maryland customers in April.

The energy market

Evelth said it could take time for the competitive market to develop in Maryland.

The Public Service Commission licenses all companies that supply energy in Maryland. Companies are investigated for financial viability, operational capability and tax compliance before being granted a license.

"We want to make sure that companies are legitimate providers," Evelth said. He also said companies have been denied licenses in the past.

Under deregulation, energy delivery remains the same - companies like Conectiv will supply power and bill customers. However, the source of electricity could be different: Third-party suppliers can generate the energy and send it to consumers along a delivery company's lines.

The new energy bills will be itemized to show customers the steps in the process, and include the costs of energy generation, transmission and delivery.

Doesn't `make sense'

Consumer choice, however, still seems confusing to customers.

Steve Tristani of Rising Sun, a pharmacist and Johns Hopkins graduate said, "I consider myself an educated person, but I spent two hours with the information and I can't make sense of it."

BGE's residential service, which covers a large portion of Harford County, will be deregulated July 1, 2006.

Energy regulation ends in Maryland on Dec. 31, 2008, when Allegheny Power ends price freezes for its residential customers.

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