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Business group: We support change to Md. utility regulation

The General Assembly is considering changes to the way Maryland regulates utility rates.
The General Assembly is considering changes to the way Maryland regulates utility rates. (Rich Pedroncelli / AP)

Maryland’s business community fully supports efforts to ensure the state leads the way with a modern, resilient and reliable energy system. The Greater Washington Hispanic Chamber of Commerce supports Maryland’s Alternate Rate Reform Bill that is currently moving through the Maryland legislature (“Senate must slow down the charge to upend the way Md. regulates utility rates,” March 18). The bill, which passed the House Economic Matters Committee with a unanimous vote and received bipartisan support on the floor, provides greater predictability for electric and gas rates, while at the same time ensuring that all Marylanders can have a say in how the state’s utilities spend money, before they spend it.

Planning is crucial to businesses of all sizes, and they will benefit from the transparency and predictability House Bill 653 and Senate Bill 572 provide. Today, Maryland’s electric and gas utilities make investments without first getting input from either those who pay the bills or those who do the work. HB 653 and SB 572 will change that. Making this change is not risky or bold. In fact, 39 other states around the country take similar approaches to those proposed in these bills. They require utilities to be transparent about the investments they plan to make, what they think they will cost, and gain approval in advance. In fact, many states allow utilities to forecast their costs and level of work for several years in advance and have been doing this for decades.

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Unfortunately, the Baltimore Sun editorial board believes that the legislation is unnecessary because the PSC already has the authority to use alternative methods in its rate-setting cases. That authority may not be as clear as The Sun thinks. We are also concerned the PSC does not appear willing to use its authority in this way and there is no reason to believe that will change without legislation.“

Greater transparency and predictability,” “more accountability,” “strong oversight” these are words that are often used by Maryland legislators to denote a good bill. This bill fits those descriptions. It includes consumer protections that exist under current law and retains the existing strong oversight of the commission. The commissioners remain the final arbiters of whether a proposal will result in “just and reasonable rates” for consumers. If they do not believe that the filing made by the utility meets this high standard, they can reject or amend it. Second, it provides greater transparency into the ratemaking process, by providing customers and other stakeholders the ability to weigh in on utility investment plans and associated costs, before these plans are implemented and the money is spent. And, finally, it increases accountability and ensures consumers are protected by holding utilities to their budgets and requiring that all forecasted costs are reconciled with the dollars spent, meaning that utilities, like today, cannot charge customers for work they don’t do.

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Access to affordable, reliable and secure energy is a critical issue for the state’s businesses and residential customers — the people businesses employ. It’s time for Maryland’s energy regulatory environment to keep up with the times and provide the same tools currently used by states who we compete with to maintain and grow our local businesses and create good paying jobs in our local communities.

David Diaz, Washington, D.C.

The writer is director of membership and sponsorship of the Greater Washington Hispanic Chamber of Commerce.

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