Rate Increase

Electricity bills for customers of Baltimore Gas and Electric Co. are projected to rise by a less-than-expected 47 percent - or about $550 for the year - starting in June, based on bids the utility received from wholesale energy suppliers this week. The latest projections reflect a nearly yearlong decline in wholesale energy prices that will trim the size of a 72 percent rate increase that was supposed to take effect last summer. Lawmakers temporarily capped the rate rise at 15 percent in response to consumer anger over the increase, which came after customers enjoyed six years of rates capped at below 1993 levels.

A day after state regulators approved a 50 percent increase in electricity rates for Baltimore Gas and Electric Co. customers, two Baltimore mayoral candidates and a handful of other city leaders began tossing out ideas for easing the blow. From repealing the city's three-year-old energy tax to studying the creation of a publicly owned electricity utility, a bevy of proposals began making its way toward the City Council as local officials struggled with an issue that they have almost no control over but that could affect their fate in this year's election.

Taxicab riders in Howard County will be paying more for transportation soon if the county government approves a request for a rate increase.Frank Osei-Bonsu, owner of Columbia Cab, the largest operator in the county, is asking for a fare that would match the rates in Montgomery County, which are the highest in the Baltimore-Washington region.Under the requested rates, an average five-mile ride for one person with luggage would cost $2 more than the current $7.60 fare, the cheapest in the region.

Little more than a month after the end of federal regulation of cable rates, TCI Communications of Baltimore, the city's cable company, said yesterday it would raise the price for expanded basic service, the most popular choice, 6 percent next month.Customers who receive TCI's expanded basic package will see their bills increase from $28.93 to $30.66 a month, not including premium channels and other charges.TCI also said it would boost the price of basic cable, which includes broadcast network stations and a few additional channels, 2.7 percent, from $11.22 per month to $11.52 a month.

To understand the task facing fiscal policy-makers, think of the U.S. economy as a car in a very long race and the Federal Reserve Board as its pit crew.The sleek American model is running well in the ninth year of an economic expansion, a blur compared with other cars on the track. The challenge is how to keep it going at a strong, steady pace without burning it out.The Fed is expected by many to raise rates for a second time this year on Aug. 24 to keep inflation in check. But economists looking under the hood see very different things.

Residents of the Freedom Area, Carroll's most populous region, might soon have to pay more for public water and sewer service.According to county Comptroller Eugene C. Curfman, the plan he proposed yesterday would raise the area's water and sewer rates about 5 percent in fiscal year 2000, which begins July 1. The issue will be considered as part of the proposed county budget during a public hearing May 6.Freedom, which includes all of South Carroll and...

BY RAISING interest rates for the second time in eight weeks, the Federal Reserve has made a clear statement that preventing any emergence of inflation is a paramount policy goal. Maintaining the nine-year economic expansion, while important, is a secondary consideration.Even though the government's own figures show benign levels of inflation, Fed Chairman Alan Greenspan and his colleagues seem preoccupied with rising prices.Some economists, however, believe we have entered a new era of noninflationary growth.

THE FEDERAL Reserve Board has raised interest rates twice this year to cool the economy and keep inflation from rising. This week, the Fed's interest rate-setting body -- the Federal Open Market Committee -- wrestles with the question once again. Will the Fed raise interest rates? If it does, what is the impact on the economy and the stock market?David WyssChief economist, Standard & Poor's DRI, Lexington, Mass.I am in the tightening camp. I think they are going to move. You look at the economy, and you look at 4.8 percent growth last quarter, and 4.1 percent unemployment -- and you have got commodity prices that are going up.Raising rates seems safer than not raising them.

U.S. personal incomes rose at their fastest rate in more than five years, and consumer spending accelerated, setting the stage for a fine holiday shopping season and, possibly, for yet another Federal Reserve Board interest-rate increase.Incomes rose 1.3 percent in October to a seasonally adjusted annual rate of $7.941 trillion after holding steady in September, the largest rise since a like-sized increase in April 1994, the Commerce Department announced yesterday.Last month's growth derived some of its strength from emergency subsidies to farmers, and still more from bonuses paid to unionized auto and aerospace workers as part of contract settlements.

State officials will meet today with the owner of a private water company serving a 30-year-old subdivision outside Westminster to ensure that residents will not lose water again.Forty-two residents in the 11-home subdivision were without water for slightly more than 24 hours beginning Monday until state officials came to their rescue Tuesday.More rescuing might occur today."Basically, we want to make certain they continue to have water and that this situation doesn't occur again," said Nancy Reilman, a division chief with the Maryland Department of the Environment.

From the point of view of businesses, the Catch-22 of unemployment insurance has always been this: When the economy is at its worst, they are taxed the most. Mark down 2009 as offering no exception to that particular rule. Based on calculations set today, Maryland is poised to raise unemployment insurance premiums to the maximum rate allowed by law in order to replenish a trust fund badly depleted by unemployment claims. In this, neither Gov. Martin O'Malley nor his Department of Labor, Licensing and Regulation has any choice.

A state regulatory panel approved on Wednesday a 1.77 percent increase in the amount Maryland hospitals can charge their patients - a compromise of sorts between the figure state cost review staff members recommended and what hospitals wanted. The 6-0 vote by Maryland's Health Services Cost Review Commission is expected to translate to higher costs for patients treated in Maryland hospitals, companies that pay for health care costs as part of workers' compensation and insurers. The increase takes effect July 1 and applies for one year to 47 hospitals, employing 88,000 people.

By now it's considered conventional wisdom that deregulation is to blame for rising electricity prices in Maryland, while states with regulated energy markets are immune from such unpleasantness. Tell that to consumers in regulated West Virginia, where two utilities recently asked the state Public Service Commission for a 43 percent rate increase. The request by Appalachian Power and Wheeling Power came after the PSC granted an 11 percent rate increase last summer. Keep in mind West Virginia has abundant coal reserves and, for now, some of the cheapest electricity in the nation.

State lawmakers, joined by advocates for seniors and consumers, called yesterday for full-scale re-regulation of Maryland's energy markets, hoping to capitalize on outrage over high winter electric bills and another possible rate increase. The proposal sets the stage for debate in the General Assembly this year over efforts to reverse what many regard as the state's failed move to deregulate markets in 1999. Legislative leaders concede that some form of re-regulation is likely, but are lining up behind a more moderate approach.

With utility bills on the rise, Baltimore City officials approved a series of proposals yesterday to help low-income residents pay for water service -- and at the same time proposed a small increase in the cost of that service. Senior citizens in Baltimore whose household income is $25,000 or less would get a 30 percent break on water and sewer bills. Also, grants to help pay those bills would be made available before water is shut off. In proposing the more lenient system, city officials acknowledged the increased price of gas and electricity and said they hoped the effort to assist with water bills would reduce the number of homes sold at tax sale against a homeowner's will.

Maryland filed a lawsuit against BGE's parent company yesterday to ensure that the Baltimore utility continues to pay out $386 million in credits to its 1.1 million residential customers. The court filing is the latest salvo in a two-year dispute over skyrocketing BGE electricity rates. Gov. Martin O'Malley and Attorney General Douglas F. Gansler contend that Constellation Energy Group, BGE's parent company, must comply with 2006 legislation that required the consumer credits to soften an impending rate increase.

With Baltimore Gas and Electric Co.'s quarterly earnings down 30 percent, Constellation Energy Group Inc. said yesterday that it will ask state regulators to increase the amount the utility can charge for delivering power over its wires. The company said it intends to ask the Public Service Commission for the increase sometime in the next year to bring BGE's rate of return in line with what is earned by comparable utilities nationwide. Though the impact on customers would likely be small - probably in the low single digits - the rate talk comes as the PSC is already under pressure to lower utility bills after a 72 percent BGE rate increase over the past year.

Concerned that rising hospital charges could jeopardize the state's system of providing care for the uninsured, state regulators trimmed yesterday a hospital rate increase that had been approved for the current fiscal year. The Health Services Cost Review Commission voted to allow hospitals a 5.25 percent rate increase for the fiscal year that began July 1, down from the 6.25 percent approved in April. The midyear adjustment - the first ever by the commission - will reduce the state's collective hospital bill, which totals more than $11 billion for the year including outpatient care, by about $65 million.

Homeowners fumed and politicians fretted when electricity prices increased by a record amount this past summer. But did people unplug? Not by much. Utility records show the average Maryland household used nearly as much electricity as in past years, even when adjusting for differences in weather from one year to the next. In the case of Baltimore Gas and Electric, significant conservation gains in the summer of 2006 were nearly erased this year as customers increased consumption again.

Now that homeowners can no longer easily use their homes as ATM machines, they are turning back to credit cards. The latest figures from the Federal Reserve show that consumers increased their amount of outstanding revolving credit -- mostly credit-card debt -- by $6.3 billion in June for a total of $904 billion. That's on top of a $9 billion increase the month before. But cardholders beware. Card issuers, like other lenders, are now sensitive to problems in the beleaguered mortgage market and unlikely to give much leeway to consumers who start appearing risky.