Electricity ratesDelmas I. Gruver, Sparks: While it would be difficult, but not impossible, why is nobody considering re-regulating the power industry for all of Maryland?
From Nitkin and Sun business columnist Jay Hancock: There is broad recognition that deregulation has not been a success for consumers in any state where controls were lifted on the utility market. The newly reconstituted Public Service Commission will examine how deregulation is working, but the difficulties you mention are real.
The alternative would be for BGE to build new plants of its own. But in either case, it would probably lead to rates even more expensive than they are now.
Richard Sullivan, Jessup: Why has there been no discussion about BGE's financial condition (since 1999)? Some obvious questions (that should affect the current issues) would include: Have dividends been reduced because of the adverse impact of the PSC price ceilings? Have net/gross margins been drastically reduced because of the '99 PSC price ceilings? If BGE's financial condition has remained about the same (or even improved), then this issue about the effects of PSC price ceilings or need to eliminate pricing ceilings seems very misplaced.
From Hancock: You're right -- there has been no deterioration in BGE's financial condition since the rate caps were installed in 2000, even though energy prices to fuel generation plants have soared. But the reason is that BGE of course knew about the rate caps and locked in its wholesale electric supplies for the long term in 2000.
Like the household rate caps, those contracts expired July 1. Now, BGE is buying electricity that is much more expensive, and if the rate caps were still there, its margins wouldn't just be reduced, they would vanish.
Davis Maloy, Columbia: While I appreciate the amount of time The Sun has dedicated to the BGE issue, there are a number of issues related to the new law that have not been touched on, or that I have been unable to locate in the many articles published.
From Hancock: Mr. Maloy, we have covered most of this stuff on Electric Shock, our all-BGE-all-the-time Web log. To answer your questions: