Slow this merger

March 01, 2006

An uneducated consumer is a utility company's greatest asset.

Given that, Maryland customers of Baltimore Gas and Electric Co. should pay very close attention to a series of obscure hearings that quietly kicked off yesterday in Baltimore.

And - so that consumers can get fully educated - the schedule for these hearings ought to proceed at a much slower pace than planned right now.

The hearings - before the state Public Service Commission - will probe plans of BGE's parent company, Constellation Energy, to merge with the Florida Power and Light Group. This is the first merger of its kind; conflicts between the commission and the energy company could end up in court.

The planned merger also comes as a state cap is scheduled to be lifted from BGE electric rates this July to allow market rates - a move that could raise consumers' bills by 40 percent to 80 percent.

The public and the state legislature are just waking up to these twin revolutions for Maryland utility customers. Some state legislators have started talking about interceding to somehow derail the merger or impose a phase-in on higher electric bills.

Not incidentally, the PSC is well into a second set of hearings on its staff's proposal to allow BGE customers to defer paying some of their higher electricity rates - but only if they pay an outrageous interest rate of 12.5 percent on their deferrals.

Yesterday's initial PSC hearing on the merger began with the question of scheduling. Testimony is set to begin April 12, and the hearings are to conclude by the end of June. Constellation would like the PSC to stick to that fast pace so it can move quickly toward the merger. But the state Office of People's Counsel, charged with representing the public, yesterday asked for a month's delay from April 12, for starters.

PSC commissioners said they'd take the matter under advisement and issue a decision on the hearing schedule this week. With so many unknowns in this merger proposal and with the state headed toward electricity deregulation, more time for public examination seems essential - at the very least.

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