Pay now, pay later, or how to pay at all

BGE customers face realization that a phase-in spreads out the rate increase without reducing it

April 22, 2006|By SUMATHI REDDY | SUMATHI REDDY,SUN REPORTER

Don't even tell Evelyn Harlee about the latest electricity plan. Don't tell her that it'll save her money.

No, the 45-year-old East Baltimore resident says, she won't be fooled into believing that the phase-in of rate increases will save her any money.

"I'm not falling for it because I can add," Harlee says, soaking her nails at a salon on Monument Street in East Baltimore. "And I know about interest rates spread over a long period of time. They tried to pull the wool over our eyes with this plan, but they ain't fooling me."

Such was the skepticism elicited from some Central Maryland residents about the proposal unveiled Thursday by Gov. Robert L. Ehrlich Jr. and the Constellation Energy Group, parent company of Baltimore Gas and Electric.

If approved by the Public Service Commission, the plan would allow BGE's residential customers to delay July's anticipated 72 percent average price increase by choosing instead to phase it in over several years.

Customers who chose the plan would see a 19 percent rate increase in July, followed by a 25 percent increase in June 2007. Customers would also pay a $15 to $19 monthly surcharge for two years starting in June 2007. By 2008 customers would be paying market rates. Over three years, customers would have paid about the same whether they chose the new plan or not.

And that, many residents and advocates said yesterday, makes the "new" plan a moot point.

"Don't be deceived," warned Mary Ellen Vanni, executive director of the Fuel Fund of Maryland, which helps low-income residents pay their gas and electricity bills. "Whether you opt in or don't, this is not saving anybody any money.

"There is no relief in this at all. We haven't reached any solution to the increase in costs for this essential commodity."

The impact will be especially painful for low-income residents, say advocates, who report an influx of calls and visits from concerned residents.

"This is not going to help low-income customers," said Richard P. Doran, executive director of the Baltimore County Fuel Fund. "The impact that they're going to feel whether they pay it now or later is the same."

The negotiations, Doran said, need to evolve into discussions on how to reduce the actual cost of electricity, rather than just decreasing the shock of an anticipated increase.

At the Samaritan Center, a program administered by Catholic Charities and St. Vincent de Paul, officials say the looming increase has residents frantic.

"This really changed the playing field for a lot of people," said Kerrie Burch-DeLuca, a spokeswoman for Catholic Charities. "It looks as if the increase is 72 percent and that's what people will have to deal with, and how you cut that pie is the difference. But it looks like the magnitude is there. It will be catastrophic."

Strolling down the street with a cane and a cart of groceries, John Heath scoffed at the gradual phase-in plan.

"That ain't good," said Heath, 68, a retired crane operator on a fixed income. "A little now, a little later. I don't think it's a better deal. No way. We can't be paying those high rates."

Heath lives alone in a rowhouse, but his gas and electricity bill averages more than $200 a month.

"It's ridiculous," he said. "People have other bills to pay other than high gas and electricity rates. We got to eat."

Kim Palmer says she has no choice but to elect the phase-in plan to afford a bill that already costs her $200 a month for a two-bedroom apartment.

"I'm a single mom with two kids," said the 30-year-old nurse. "I have no choice. I still have to pay the balance for my last bill. It's expensive enough now."

Others are less irate. Lawrence Rose, 60, is planning to absorb the full 72 percent increase whenever it hits him.

"I know what's coming," said Rose.

And so the shift supervisor for the Baltimore City Jail Labor Program plans on turning off his water heater during the day, and he's going to buy fluorescent light bulbs.

He already turns off his refrigerator when it's empty.

"I'll save some money by doing that," said Rose, whose average bill for an apartment in a rowhouse is about $47 a month. "There nothing I can do, so there's no point in being upset. It's coming. I'll just accept it."

Some residents say avoiding the sticker shock of a 72 percent increase come July makes things a tad easier, even if they're only buying time.

Tremia Wallace has been unemployed since August, her main income a $430 monthly payment from social services.

The 31-year-old Dundalk resident receives assistance in paying her gas and electricity bill. She says she would choose a phase-in. But she fears whatever increase she faces in the future, be it 19 percent or 72 percent.

"Living now is hard, real hard," said Wallace. "And with the gas and electric thing it's going to get even harder. But they don't care. They just want our money. ... But God dang, how much do they want from us? We cannot live like this."

sumathi.reddy@baltsun.com

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