It's a virtual certainty that this is going to be a colder and more expensive winter. Baltimore Gas & Electric Co. is asking the Public Service Commission to authorize an increase of 12 percent in utility rates, and while the PSC undoubtedly will not approve that much, it's certain to approve a pretty substantial hike.
BG&E; argues, correctly, that cost increases averaged over 5 years have not exceeded inflation, and that the cost of power has been low compared with rates nationally. This, however, has been primarily because of cheap power from Calvert Cliffs, which was shut down 18 months ago after the Nuclear Regulatory Commission cited the plant for mismanagement. BG&E; disputes the NRC's indictment; nevertheless, replacement power has been costly. And if consumers did get artificially lower-cost power because the utility skimped, isn't it fair that they pay the piper now?
Such arguments, however, are of little consequence to struggling families saddled with increasing property taxes or rents who can't afford even a 6 percent increase. Worse, this proposed rate hike is just the opening shot. In part because of Calvert Cliffs' shut-down, BG&E; will file for another increase next summer.
As onerous as the escalating costs will be, they are a symptom of a larger problem: State policy rewards utilities for encouraging consumption. That's a skewed notion, both in terms of the costs to consumers and the environment. BG&E; recently made a sensible proposal for a new, time-use billing program in which night-rates for electricity will be about half of day-rates.
That's good, but it's not enough. California and several New England states are experimenting with a system of incentives that make it profitable for utilities to encourage consumer conservation. The new round of rate hike proposals are a mandate for Maryland officials to do the same.