Knowledge is power

Our view: Maryland's energy future requires an informed choice

July 20, 2008

Anyone who still believes Maryland's surging electricity rates and deregulation debacle are somehow unique to the state ought to take note of what's been happening in Texas. Utility customers in the Lone Star State (often touted as one of the nation's most ambitiously deregulated) have seen once-cheap wholesale prices spike to many times the national average.

The causes are familiar - global demand for natural gas, a congested power grid, and utilities spinning off their power plants to third parties. The results are the same as here, too: sticker shock for customers.

Next month, when Douglas R.M. Nazarian takes over the top post at the Maryland Public Service Commission from outgoing Chairman Steven B. Larsen, he will inherit this essential quandary: Should utilities build their own plants, enter fixed-term contracts for power, or pay as they go?

As painful as BGE's rate hike may have been, it's clear that whether Maryland deregulated or not, customers would be paying substantially more for electricity now then a decade ago. And the future looks to hold more such price increases. Renewable power is not cheap. Even conservation requires investment - if not in electricity then in efficiencies.

Just because Maryland's 1999 deregulation efforts made matters worse doesn't mean a re-regulated market is best for the future. What's needed is a complete and detailed analysis of risks and rewards of the various options. The PSC didn't have that nine years ago. It is essential to have it now.

The problem facing Maryland - and much of the country - is not just the rising price of electricity, it's avoiding future power shortages.

Baltimore-area ratepayers need to get past the notion that life is going back to how it was before. It isn't. Mr. Nazarian and the PSC have only the power to change the future, and perhaps avoid an even worse debacle than Marylanders have so far experienced.

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