Md. regulators offer some relief to customers after energy bill spikes

Responding to utility bill spikes that accompanied this winter's extreme cold, Maryland regulators took steps Friday to bring customers some relief.

With the changes included in the Public Service Commission order, customers now can change energy suppliers more quickly, arrange budget billing plans and get extensions or other help with mounting bills.

Residential bills jumped about 20 percent on average in January compared with January 2013, the PSC said. The unusually cold weather was coupled with increases in wholesale gas and electricity prices.

Hundreds of customers complained to the commission about some suppliers providing misleading information about how rates could change and how to cancel contracts. Rates for some electricity or natural gas customers with variable-rate contracts doubled or more than doubled.

Customers of suppliers with variable-rate contracts were among the hardest hit, said People's Counsel Paula M. Carmody, whose agency represents the interests of utility consumers in Maryland. Some didn't realize that a "teaser" rate would increase, she said.

Even with the extreme cold, "our agency is perplexed when we've seen these contracts up through 48 cents per kilowatt hour," compared with BGE's standard offer of 9.5 cents per kilowatt hour, Carmody said. "At the minimum, the notice and disclosure around variable-rate contracts has to be changed. Our agency believes we have to consider capping [the rates]. These contracts are very high risk."

In its order Friday, the PSC waived requirements under Maryland law that lengthen the process of switching suppliers. The order, in effect through July 31, requires utilities to transfer an account within three to five business days of a customer's request. It only applies, however, to customers who have had "smart meters" installed by BGE or other utilities. And it would not apply in cases where contracts require 30 days' written notice of cancellations.

The PSC encouraged utilities to continue to work with customers in need of more payment flexibility.

"We're in the process of reviewing and evaluating the order," said Aaron Koos, a BGE spokesman. "We know that the PSC adopted the four consumer protections that we'd previously voluntarily offered to the PSC in March. We had been implementing these protections even prior to the issuance of this order."

BGE is allowing retroactive budget billing for customers who owe past due amounts of up to $500, through May 31, and will not discontinue service for nonpayment if the past due amount is less than $500, also through May 31. The utility also will work out payment plans of up to 18 months for customers who can't qualify for budget billing and will allow payment plans, through May 31, for customers who have defaulted on a payment plan during the past 18 months.

Under the order, energy-assistance grants, available to low-income customers, can be used to pay the supply portion of the bill as well as other charges in cases where customers have chosen an energy supplier.

"Eligibility follows the same process that customers have always had to submit for assistance," through the Maryland Energy Assistance Program, said Regina Davis, a PSC spokeswoman. "The only difference is that the utilities must also apply the funds to the supplier portion of the bill. ... Whether the grant covers the whole bill or only a portion depends on the customer's monthly usage."

The PSC also said it plans to look for longer-term solutions, such as extending the option of budget billing to all gas and electricity customers.

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