BGE rate increase? It's how we live

March 16, 2006|By DAN RODRICKS

I hold in my left hand the names of 129 Maryland delegates and senators who voted in favor of deregulating the electricity market here in 1999. Many are still in office. Most are Democrats, of course; a few are Republicans. The only nay votes in '99 came from about 50 skeptical Democrats in the House and Senate. But they were vastly outnumbered by those who sipped the Electric Kool-Aid and believed deregulation would lead to more competition for BGE and better rates for consumers.

The majority was wrong, of course. Seven years later, there's still no competition for BGE in this market and, just in time for the 2006 air-conditioning season, consumers face a whopping 72 percent increase in electricity bills. That's what deregulation got us.

Since the Public Service Commission's approval of BGE's plan to socket -- get it? sock-it! -- to consumers to make up for six years of restricted rates, there's been a whole lot of finger-pointing and off-with-their-heads-calling.

The Sun the other day ran on its front page mug shots of the five PSC members, like some kind of wanted poster. (Not that there was anything wrong with that!)

Baltimore Mayor Martin O'Malley, who I doubt had an opinion about this until last week, cracked that the PSC has gone from watchdog to lap dog -- get it? that's killer! -- and he set up an online petition drive to have the head of the commission removed.

Off with their heads!

In Annapolis, legislators are scrambling to soften the blow for consumers.

(Sweet, isn't it? I think that's called "pay it backward.")

And in this newspaper the other day, the CEO of BGE's highly profitable holding company defended the rate increases and said people should not resent that he and the "varsity" over at Constellation Energy stand to make millions from a proposed merger with another power company. (The "varsity" line came from Mayo Shattuck. He's the guy with the overexposed cheerleader wife and enough money to buy Dundalk. Sun business columnist Jay Hancock thinks Shattuck could make $40 million from the Constellation merger with Florida's FPL Group Inc. It's enough to make you hurl.)

But it's all galling and appalling.

This is one, big, ugly story from start to finish, and in that way a classic from 21st-century America. Industry trumps public interest. Politicians cave to big business and dismantle a perfectly fine system of price controls on a public utility. Citizens tune out. Government drops -- and former industry officials assume -- its regulatory role. Profiteers move in for a killing. Citizens tune in only after all the damage is done. Politicians try to compensate by "softening the blow" for their constituents.

Don't get me wrong.

I'm as appalled as the next guy.

I'm thinking about the electric bill this coming year -- another $743. Whenever I hear someone say, "It's going to be tough on people on fixed incomes," I figure they're talking about pensioners and the disabled, but also about me and most of my co-workers and friends, and the hundreds of minimum-wage workers I've interviewed during the past year. The cost of energy has pretty much negated any piddling wage increases we of the hourly worker set have enjoyed in recent years. Meanwhile, global energy corporations continue to make huge profits and people like Mayo -- may I call him that? -- keep piling up the green.

Appalling and galling.

But, you know what? It's how we live.

This is America, land of the free, home of the knave. We get the government we deserve. We get the system of regulation -- or no regulation -- we abide. If we swear by the free-market model for everything -- even health insurance and electricity -- then we get what that system delivers for the price it demands. If we tune out of politics and drop our standards and our vigilance, then we end up with leaders who have been co-opted by special interests and the corporate class.

We have built an entire society on old-school assumptions of endless and cheap supplies of energy -- housing in the deep suburbs and far from work, gas-guzzling SUVs, home entertainment systems, air-conditioning 24-7. We've had energy crises over the years (1973 and 1979, in my experience) but quickly forgot the lessons, and no politician has been willing to lead a sustained public conversation about where we go from here.

So, look, I'm with you. I'm as appalled as the next guy. I think what BGE wants from us is outrageous. I guess it would be a good thing for the Maryland legislature and the governor to find a way to soften the blow for consumers. I won't complain if they do.

But, in my book, that's an old-school reaction to this whole thing. It's just temporary and patronizing.

What we need is a decades-long reality check, not more baby talk. We need a whole new big-think about energy, where we get it and how we use it. Public leadership that calls for real sacrifice and rewards innovation would be nice. Business leadership that took the long view-- instead of fast cash -- would do us good. I could leave this world less worried about my children if I thought their generation learned to embrace a simple idea: How we live as individuals affects how -- or whether -- we survive as a society.

dan.rodricks@baltsun.com

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