The rigging of the electricity marketplace to enrich power companies and executives looks even worse than we thought.
Just as Maryland was getting shocked by higher kilowatt prices, grid managers have allowed extra profit for generation outfits such as Constellation Energy, parent of Baltimore Gas and Electric Co. The bonus, whose magnitude was revealed Friday, might eventually cost the typical BGE household $10 a month or more and add hundreds of millions of dollars to Constellation earnings.
At the same time, the Mid-Atlantic watchdog responsible for ensuring fair electricity auctions has stunned the industry by alleging that grid bosses pressured him to alter a key report and compromised his independence.
These events suggest a new level of shenanigans and demand investigation at the highest levels -- by the General Assembly and Public Service Commission in its electricity hearings this week, certainly. But also by Congress, which can revamp the incompetent Federal Energy Regulatory Commission (which governs interstate grid commerce) in ways states cannot.
Apparently, it wasn't enough that, after deregulation seven years ago, Constellation took over the BGE generation plants with no compensation to BGE customers. It wasn't enough that Constellation charged customers an additional $528 million in "stranded costs" by arguing that the valuable generators might be obsolete.
It wasn't enough that, after last year's expiration of deregulation-required price caps, the plants' cheap coal and nuclear fuel costs give Constellation supercharged profits in a market inflated by more-expensive natural gas generation.
Now grid managers will let generation companies such as Constellation levy a surcharge that Baltimore energy experts South River Consulting calculate could eventually cost BGE households about $200 a year. BGE says it's less -- maybe $120 a year. Either way it's too much.
The charge is being phased in, and customers won't see a separate line item on their bills. But this summer the "capacity" premium will add $5 to the "generation supply" portion of a typical BGE bill, which is set to rise 50 percent after June 1, and it may go higher later.
The capacity charge is a humdinger, destined for a Ripley's museum. It does not pay for coal, uranium, salaries or any other expense. It's basically a fee that BGE, Mittal Steel and other users pay to ensure access to potential megawatts at times of high use.
