Credit competition for favorable BGE rates so let’s not abandon that strategy | READER COMMENTARY
For The Baltimore Sun|
May 19, 2020 at 4:53 PM
Baltimore Gas and Electric Company’s recently proposed two-year rate freeze would be welcome relief for Maryland families and businesses struggling under the impact of the COVID-19 pandemic (“BGE wants to freeze utility rates for 2 years, then increase them by 8% in 2023,” May 15). The utility estimates that even after the nearly $13 increase per month in 2023 needed to make up for the payment pause, rates will still be 20% lower than in 2008. That’s great news, but let’s not forget what’s driving lower bills.
Maryland ended monopoly status for electric companies like BGE almost 20 years ago, meaning companies have to compete against each other to provide power to Maryland homes and businesses. The result? Since 2008, competition among power suppliers has lowered prices, translating to lower electric bills. In fact, energy prices in PJM Interconnection, the regional power grid serving Maryland, were at record lows for 2019.
BGE should thank PJM’s competitive markets for making the rate freeze possible for its customers. Instead, its parent company, Chicago-based Exelon, is urging Maryland regulators to abandon competition and leave PJM’s regional market. Independent estimates suggest an exit could force Marylanders to pay an extra $206 million per year — while Exelon would likely enjoy a nice boost to its bottom line and less pressure from competitors to keep power costs low. Now, more than ever, states should encourage and expand competition among power suppliers. Exiting the market to pick and choose favored power suppliers to achieve policy goals is inefficient and costly — and customers ultimately have to foot the bill.
Meanwhile, regional competitive markets are enabling meaningful environmental progress across state lines while driving down prices. As we collectively pick ourselves up from COVID-19’s economic damage, the competitive path is the win-win track for customers’ wallets and the environment.
Todd Snitchler, Washington, D.C.
The writer is president and CEO of the Electric Power Supply Association.