The state's largest utility told regulators yesterday that competition is Maryland's best hope to deal with rising energy rates, while consumer advocates countered that electric deregulation is a failure and needs to be reformed.
The two sides presented their divergent views at a Public Service Commission hearing to consider options for re-regulating the state's power industry - part of a continuing review of the 1999 legislation opening the market to competition.
Lawyers representing industry and consumers each declared the other's proposals would result in higher electric rates, which in the case of Baltimore Gas and Electric Co. have climbed 85 percent since deregulation became law in 1999.
The latest hearings are a follow-up to the PSC's preliminary report on re-regulation, which concluded in December that competitive power markets can't be trusted to deliver low costs or to build enough power plants to keep the lights on. The commission indicated it stands ready to impose some form of re-regulation.
The state People's Counsel argued that the current system should be replaced with one giving partial control back to the state. William Fields, an attorney for the agency, argued that utilities could lower prices by buying power through long-term supply contracts, or by building new power plants that would have their profits regulated by the state.
BGE and its corporate parent, Constellation Energy Group, countered that soaring fuel costs - not deregulation - are to blame for higher electricity rates. They contend things would be worse were it not for competition, and that unfettered markets will produce the best result if regulators and politicians give it time.
"We don't believe it's in the best interest of our customers to enter into long-term contracts," said William B. Pino, director of electric supply for BGE.
"It's just a gamble that you're going to, quote, 'beat' the market," Pino said.
The PSC has until December to report its findings and recommendations to lawmakers. The report was mandated in legislation passed last year.
Much of yesterday's debate centered on plans to revamp how utilities buy electricity. As part of deregulation, utilities either sold or transferred ownership of their power plants. They now purchase power by soliciting bids from wholesale energy suppliers, who enter into rolling two-year contracts with the utilities.
