Gov. Martin O'Malley said yesterday that eliminating the link between power companies' profits and the amount of energy they distribute - a plan recently approved for Pepco, the Washington-area utility - could be one of the most effective strategies for reducing electricity bills across Maryland.
Officials with that company say they could begin incentive programs to help consumers conserve energy as early as this fall, and the idea of "decoupling" is likely to be a major issue at the energy summit O'Malley will hold in Annapolis today.
"In the past, the energy companies had a profit motive in promoting consumption," O'Malley said. "If we can decouple that, I think it's a step in the right direction."
Besides conservation, the governor's energy summit will focus on strategies to ensure that adequate supplies can either be generated in Maryland or imported from other states. It will be followed by two days of hearings by the Public Service Commission (PSC), when experts will help the state forecast its power needs for the next five to 10 years and to develop the most efficient ways to provide that energy.
O'Malley, who campaigned last fall on stopping steep Baltimore Gas and Electric Co. rate increases, has focused on energy policy as much as any other issue in the last few months. The governor was forced to concede after PSC hearings this spring that the state had no authority to roll back the BGE rate increases, but he has concentrated on conservation initiatives and changes to the state's electric market.
"We are all getting socked by high energy bills," O'Malley said. "Deregulation has failed to bring about the promised benefits to consumers. ... The area that each of us can control in an environment where we feel like the deck is stacked against us is our own consumption."
With 1.1 million customers, BGE is the largest utility in Maryland. Pepco and Delmarva Power customers have also seen large price increases in recent years.
Pepco proposed its decoupling plan, and the PSC agreed last week to let it go into effect. O'Malley said he was heartened to see the PSC's decision and would like to see the concept spread throughout the state.
Under deregulation, companies such as Pepco and BGE make money from distributing electricity, not producing it. Distribution charges are generally a much smaller part of customers' bills than the cost of the electricity itself.
