By Jamie Smith Hopkins, The Baltimore Sun
9:11 PM EDT, April 25, 2013
Baltimore Gas and Electric Co. said Thursday that energy prices will rise $6 a month for the typical residential electricity customer who doesn't use an outside power supplier, the first jump in energy prices in four years.
That rise in costs, running from June through next May, comes on top of a distribution-rate increase approved in February. The state calculated that distribution rise at $3.33 a month for the average residential electricity customer, though BGE said typical customers — halfway between the biggest and smallest power-users — would pay $2.66 a month extra.
BGE attributed the energy increase to rising natural-gas prices, among other factors.
"We fully understand that cost increases are never welcomed," said Robert L. Gould, a BGE spokesman. "But we really encourage our customers to help offset the increase."
One strategy: Shop for another energy supplier. The $6-a-month increase is for customers who stick with BGE, the default supplier. Competing suppliers may charge less.
BGE said nearly 30 percent of its residential electric customers use third-party companies for their power supply.
Gould said customers also can sign up for an incentive program such as PeakRewards to lower their costs by cutting back on energy use.
How much customers' bills ultimately increase is fueled by their energy use — as a separate calculation by the state makes clear.
The Maryland Public Service Commission's staff said the average BGE residential customer would see a total bill increase of nearly $13.70 a month, with about $10.30 for energy and the rest for distribution.
That's significantly higher than BGE's estimate, the utility said, in part because the state has stuck with an older average energy-use figure for consistency's sake, while customers' energy use has declined markedly in recent years.
The price of natural gas, one of the fuels used to create electricity, plunged in recent years but is on the rise. It cost electric utilities about 16 percent more for natural gas in February than it did the previous year, according to the most recent data from the U.S. Energy Information Administration. The industry's cost for coal and petroleum dropped modestly during that period.
BGE said customers' energy costs will be nearly 8 percent lower from June through next May than they were in the 2009-2010 period, thanks to drops in the intervening years. The new price is 14.6 cents per kilowatt hour, compared with 15.8 cents four years earlier.
The $6 extra a month compared with last year is averaged over the 12 months starting in June, BGE said. That's because the utility charges higher rates during the summer.
Ruth Baisden, a BGE customer from Parkville, said an additional $6 a month, even on top of about $3 extra for distribution, might not sound like a lot. But it's a one more thing for people whose incomes are stuck even as other costs of living rise, she said.
"We have a lot of seniors and people living on fixed income in our area, so this does really hit them hard," she said.
Besides that, people still have angry memories of 2006, when BGE announced a 72 percent spike in rates.
"I don't think people have really got over that yet, to tell you the truth," Baisden said.
BGE's natural-gas customers, meanwhile, could see a surcharge in the near term. Legislators approved a measure in the last session to make it easier for utilities to add infrastructure surcharges of up to $2 a month for gas-infrastructure improvements. BGE has said it expects to ask Maryland regulators to OK such a surcharge "sooner rather than later."
But BGE said it expects energy costs, at least, will ease next year. The current forecast is for an 8 percent to 10 percent drop, said Mark D. Case, BGE's vice president of strategy and regulatory affairs.
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