Most consumers probably don't understand how utility rates are set and don't feel like they have the power to do anything about it, said Essex resident Mark A. Yost, Sr., who lives in BGE's service territory.
"I don't doubt that their core costs have gone up," he said. "And yet you read about all the profits that [Constellation is] making and returning back to shareholders."
He expects an initial outcry when the new rate is announced, but "time goes on, and people forget," he said. "Probably nobody notices $2 in the end."
Consumers can now shop for an alternate electricity supplier and take advantage of low commodity costs, locking them in for an extended period, Case said. (Customers within BGE's service area who signed a contract with a different supplier would still pay the increased distribution rates, because the power and fuel are delivered through systems maintained by the utility.) He added that no compensation for Constellation executives is included as part of the costs the utility is bringing to the commission.
Kathleen T. Snyder, chief executive of the Maryland Chamber of Commerce, was surprised that BGE went 17 years without seeking a distribution rate increase for electricity customers.
"A company does have to recoup its costs," she said. "This recommendation seems reasonable."
She thinks the timing is fortunate, coming as electric commodity prices are falling.
"This distribution rate increase is very small in comparison to the overall rate reduction that BGE customers would get," Snyder said. "The bottom line is … consumer costs are going to go down starting in June. I think that's good news for everybody."
The last time BGE requested a distribution rate increase was in 1993. However, since then, consumer advocates have contended that the utility charged ratepayers too much.
In 1998, the state's Office of the People's Counsel, which represents consumers, asked the Public Service Commission to review BGE's rates and recommended a $110 million cut because of reduced capital investments and costs.
As part of its deregulation settlement in 2000, BGE agreed to decrease distribution rates by 6.5 percent — and to maintain that rate for six years. Company officials say they have continued to maintain that reduced rate.
