When bids from power providers to provide electricity to BGE households flunked a test to ensure fair prices two years ago, Maryland regulators changed the rules and approved high offers anyway, a new report shows.
Was that reasonable? How much did that move contribute to the 70 percent price increase suffered by Baltimore Gas and Electric Co. customers?
We don't really know. Gov. Martin O'Malley has won some rebates for BGE customers, but the real work of Maryland rate relief must still be done: cracking open the black box that allows a powerful cartel to control the state's electricity marketplace.
At least when Arab sheiks and South American blowhards fix the oil markets, they announce what they're doing. Who would have thought Maryland's deregulated electricity market would be less transparent than OPEC?
"It is our belief that Marylanders still do not have all of the facts necessary to understand why the price of electricity remains high," said Robert McCullough, an Oregon energy consultant who found that in at least one case BGE customers paid 20 percent more than the market price for juice.
Last week's report on BGE's electricity deals is prime evidence. The report, by law firm Kaye Scholer, found that BGE and parent Constellation Energy Group did nothing wrong during the process that led to historic price increases and Constellation winning most of BGE's business.
But it is pocked with blackouts -- 124, by McCullough's count -- and raises more questions than it answers. (Disclosure: McCullough's firm bid and lost on another analysis job that the Public Service Commission awarded to Kaye Scholer.) A censored report on a secretive auction doesn't generate huge confidence.
"There was a whole paragraph blanked out on page 6," says Kenneth Rose, an energy consultant based in Ohio. "Why? Every single word? Who is this protecting?"
What wasn't blanked out raises eyebrows. Deregulation required BGE to shop for electricity in Maryland's wholesale power market -- a market dominated by its corporate parent, Constellation Energy, which took over BGE's generation plants. At one 2005 auction, every single offer exceeded a threshold that regulators had set to prevent exorbitant prices.
What happened next? The PSC, under Gov. Robert L. Ehrlich Jr. and Chairman Kenneth D. Schisler, raised the threshold, allowed generators to re-bid and passed along the high prices to BGE households.
