BGE rebate plan gets OK

Utility distribution of $170 credits to begin in Sept.

May 29, 2008|By Paul Adams | Paul Adams,Sun reporter

Baltimore Gas and Electric Co. customers will get a one-time break from rising electricity bills in September, when the utility begins distributing $170 credits as part of a plan approved by state utility regulators yesterday.

The bill credits were contained in a $2 billion settlement that state lawmakers approved last month to resolve a dispute with BGE's corporate parent, Constellation Energy Group Inc. Lawmakers passed the deal in the final hours of the legislative session, ending a long-simmering feud over terms of the 1999 deal to move the state to a deregulated power market.

The rebates will go to all of BGE's residential customers as of Aug. 29, which the utility estimates will be more than 1.1 million homes. The $170 will appear in the form of a credit in the next month's bill.

The Public Service Commission approved BGE's proposed plan for distributing the credits yesterday. A BGE spokeswoman declined to comment, saying the utility was still reviewing adjustments that the commission made to the plan. Legislation approving the credits called for the payments to be made by Dec. 31.

The givebacks will cost BGE slightly more than the $187 million called for in the deal brokered with lawmakers, documents submitted by the utility show. When the settlement was struck, it was estimated the credits would amount to $170 per customer - a number arrived at by dividing $187 million equally among an estimated 1.1 million customers.

But current forecasts indicate that the utility will have 7,000 more customers on its rolls in August. Rather than spread the $187 million among more households, BGE said it would keep the rebate at $170 per household and absorb the added cost, which amounts to more than $1 million.

The credits will briefly help ease a roughly 8 percent increase in utility bills that takes effect Sunday. BGE and other investor-owned utilities in Maryland were hit with higher costs when they purchased power for their customers through a competitive bidding process this spring. The higher prices are passed through to BGE customers.

Combined with previous rate increases, BGE's residential customers will be paying 85 percent more for electricity this summer than they were before deregulation was passed in 1999.

paul.adams@baltsun.com

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