Critics say the system is flawed because it subjects consumers to the whims of the market, which some contend is insufficiently competitive and results in high prices. Consultants for the PSC studied the possibility of having utilities buy back their power plants. But they concluded that option would cost $18 billion to $24 billion - an impossibly high price for consumers to bear.
The People's Counsel says the state should instead require utilities to buy power through a portfolio of short-, medium- and long- term contracts that would be actively managed - much like a stock portfolio - to achieve the lowest price. The agency hired consultants who concluded such an approach will deliver the best price. By contrast, their models show that sticking with the current method puts consumers in a worse position.
"We can do better," Fields said.
BGE's Pino was skeptical of the underlying assumptions in the People's Counsel's analysis. He said buying power under 15-year or longer terms would shift more risk to consumers, potentially supplying them with high-priced power if the market price for electricity goes down before the pact expires.
"So in the big picture of re-regulation, it sounds like BGE's position at this point is 'stay the course?'" said Steven B. Larsen, PSC chairman.
Pino responded 'yes,' though the utility has suggested a variety of tweaks, such as switching to three-year power contracts. .
Barbara Alexander, consumer affairs consultant for AARP, agrees changes need to be made. She believes utilities don't like the People's Counsel approach because they don't want to be back in the business of owning power plants or managing their power supply. "The utilities want no active responsibility," she said. "They want to say to people, 'it's not our fault,' and you have to change that culture."
paul.adams@baltsun.com
