Your electricity bill

February 26, 2006

It's going up - way up, beginning this summer, by something like 40 percent to 80 percent. There's no way around it. That stems from state electricity deregulation legislation enacted in 1999. You likely didn't pay close attention then, but that bill actually froze Baltimore Gas & Electric Co.'s rates at their 1993 level less 6.5 percent - until this July. Pretty good deal. But now it's time to pay the piper - just as the costs of oil, coal and gas, which fuel electricity production, have soared. BGE has been taking bids from potential electricity suppliers; the outcome - and the damage to your family's budget - will be known this spring. Brace yourself.

Meanwhile, there's another crucial deal in the works: the $11.5 billion merger of BGE's parent, Constellation Energy, with the company that owns Florida Power & Light. This would create the nation's largest competitive electricity supplier and the second-largest electric utility portfolio. For Constellation, this deal suffers from bad timing, given its overlap with a state election year, high energy prices and the end of controlled electricity rates in Maryland. Certain consumer-minded legislators, led by state Sen. Leo E. Green, a Prince George's County Democrat, are trying to force more state oversight of the merger. A ruckus - in the form of very close, very sustained scrutiny - is much in order.

This is the first such national merger to arise after the repeal of the 70-year-old federal Public Utility Holding Act, New Deal legislation to protect utility customers from funding non-utility ventures. In terms of other protections against that, utility regulation has come a long way since then and since even the Enron and California-power debacles earlier this decade. BGE officials insist existing federal and state regulations wouldn't let them foist any costs on Maryland customers from their national electricity supply business or their Florida utility. At the same time, they're sparing no expense on Annapolis lobbyists - including two former House speakers - to argue against the state asserting the right to approve the merger, apart from required federal approval.

That jurisdictional fight could be the outcome of state Public Service Commission hearings on the merger if the hearings, which open Tuesday in Baltimore, end with a state effort to impose tough conditions on the deal. In any event, this is Maryland's best shot at ensuring that BGE customers are protected. The Maryland Office of the People's Counsel already says it will use these hearings to examine whether Marylanders could end up paying for utility damage from Florida hurricanes. Senator Green and more than 30 other senators have signed a resolution asking Attorney General J. Joseph Curran Jr. to participate in questioning BGE in these hearings - an appropriate role. PSC commissioners, four of five appointed by Gov. Robert L. Ehrlich Jr., have a complex, important task before them: holding Constellation's feet to the fire on behalf of BGE's customers. And no amount of Annapolis lobbying should cause them to shrink from that.

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