The Maryland General Assembly has an opportunity to shave a possible $1.5 billion off the future bills of Baltimore Gas and Electric Co. customers. Lawmakers need to take it. Not only would that be a welcome reversal of recent trends, but it also might finally put to rest one of the most nagging concerns from the state's 1999 deregulation.
At issue is how much BGE customers should be on the hook for the eventual decommissioning of reactors at the Calvert Cliffs nuclear power plant owned by Constellation Energy Group, the utility's parent. Under the negotiated agreement, ratepayers are responsible for as much as $5.2 billion in cleanup costs by 2034.
That's a lot of money - and it's not entirely clear whether so much is really needed. Constellation officials have informed the federal Nuclear Regulatory Commission that the shutdown is likely to cost $3.7 billion.
Legislation backed by the Maryland Public Service Commission would essentially cap ratepayers' liability to that new estimate. And if approved, BGE customers would see the savings as early as 2016, when some project a surcharge will have to be added to monthly bills to augment the amount already set aside for decommissioning.
To some extent, this is a theoretical savings that depends on long-range projections of costs and earnings. But the potential $5.2 billion liability is no mere abstraction. Reducing it by $1.5 billion is also real - and that's why Constellation opposes it.
The company's chief argument is that the 1999 settlement shouldn't be revisited in any way. This is the "unstable regulatory environment" that its executives have loudly bemoaned. But what the PSC is recommending is not putting an end to ratepayer liability, only capping it at a level the NRC has accepted as a best estimate.
The legislation also would give the PSC greater oversight over how the money set aside for decommissioning is invested. The state now has little say in the matter, a glaring flaw.
None of this changes the fact that energy prices are going up and will likely continue to do so. Maryland must look for ways to augment supply and to encourage conservation and alternative sources. But that doesn't mean an opportunity to right some regulatory wrongs of the past should be ignored.