Rate Increase

The 61 pilots who guide ships up the Chesapeake Bay to the port of Baltimore will get a nearly 12 percent rate increase over the next two years as part of a five-year agreement between the Association of Maryland Pilots and maritime business leaders. The deal came after a five-month review that lacked much of the acrimony that has characterized past negotiations between bay pilots, state regulators and industry leaders. The industry has historically fought any increase out of fear that higher costs might drive business away from Baltimore.

Potomac Electric Power Co. yesterday proposed its first rate increase in four years for Maryland customers, saying it was prompted by delays in obtaining regulatory approval of its merger with Baltimore Gas and Electric Co.Customers' monthly bills would rise by about $6.60, to an average of $73.40, if the request is approved by the Maryland Public Service Commission.The request, filed with the PSC yesterday, would cover rising costs associated mainly with an $11 million-a-year purchase of power from a co-generator in Brandywine late last year, Pepco officials said.

All of the candidates for governor say they want the General Assembly to craft a winning plan to ease in Baltimore Gas and Electric Co.'s pending rate increase. But who will emerge from the state legislature's expected special session next week as the political winner will depend on what resolution - if any - is reached. BGE electric rates are set to go up 72 percent July 1 with the expiration of rate caps instituted in 1999 as part of Maryland's energy industry deregulation. The state legislature is expected to reconvene to fashion a plan to soften the blow of the increase.

Arguing that Chesapeake Bay pilots have not reduced their ranks to match declining ship traffic, the staff of the Public Service Commission has recommended that they be granted less than half the 33 percent rate increase they are seeking."

Maryland's hospital regulatory agency has granted two Johns Hopkins Health System hospitals a 5 percent rate increase to cover $15.6 million in costs associated with closing financially troubled Homewood Hospital Center.In addition, the Health Services Cost Review Commission wants to increase the cost per admission of each of the 62 Maryland hospitals under its jurisdiction an average of $5 to pay off Homewood's $7.8 million bond debt, according to John Colmers, executive director of the commission, which sets rates for the majority of Maryland's hospitals.

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.

The state's hospitals are due to receive a rate increase of 7.04 percent this year, but regulators recommended yesterday limiting the rise to 5.21 percent. The difference would reduce the state's collective hospital bill, now about $7 billion a year, by about $250 million, according to estimates by the Maryland Hospital Association. "We need to be cognizant of the impact this would have on the public," Robert G. Murray, executive director of the Health Services Cost Review Commission, told the panel at its monthly meeting yesterday.

Profit margins at Maryland hospitals slipped again last year, the fourth straight year of decline, according to figures released yesterday by the Maryland Hospital Association. Operating margins for the hospitals as a group, though tight, gained slightly in 2000, to 1.1 percent from 0.9 percent in 1999, according to the MHA. But total margins - including nonhospital items such as investment income - dipped to 2.4 percent from 2.5 percent in 1999. The profit squeeze prompted the MHA earlier this month to say that it would seek a larger than planned rate increase for the fiscal year beginning in July.

SACRAMENTO, Calif. - After spending months voicing opposition to rate hikes, California Gov. Gray Davis acknowledged to a statewide television audience last night the need for an electricity rate increase that would average 26.5 percent. For the first time calling it an "energy crisis," Davis enumerated steps he has taken, then said he has fought "tooth and nail against raising rates." But saying increases were needed, the Democratic governor called for a tiered system in which people who use the most electricity pay the most - as much as 37 percent if they use more than twice their minimum allotment.

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.