An energy expert told the Maryland Public Service Commission that if the state had not deregulated the industry back in 1999, consumers might have faced only a 19.2 percent increase in utility rates, as opposed to the 72 percent Baltimore Gas and Electric?s 1.2 million customers are facing now.
Steven Estomin, a principal of Exeter Associates, testified before the PSC that he has studied rate increases in states that did not undergo restructuring like Maryland did in 1999. He told the panel that in those states, consumers have only experienced a 19.2 percent rise in electric rates since Maryland?s deregulation, not the 72 percent Maryland consumers will be paying.
“I see no reason why consumers here would not have seen the same 19.2 percent rate increase [if Maryland had not deregulated],” Estomin said.
That is a sentiment that was echoed in demonstrations held by the Maryland Coalition to Stop the BGE Rate Hike outside of Constellation Energy?s Baltimore offices on Lombard Street. Representatives from the group told a crowd “a rate increase will cause the loss of lives and increased homelessness.” The group, which testified before the PSC last week, is advocating for re-regulation of the utility.
Commissioner Lawrence Brenner pressed Estomin about strategies and directives the PSC could implement to help consumers.
“Do you think BGE should have their own plant with their own generation, or should BGE conduct more auctions to suppliers, or have a hybrid system or both?” Brenner asked.
Estomin told him, “It would be difficult for BGE to have its own generation now since the expertise in that area is no longer within BGE.”
The PSC will conclude hearings Thursday, and the results of the bid process to supply power to BGE will be announced that day.
BGE and its parent company Constellation Energy have a lot at risk in the outcome of the hearings.
“BGE is subject to significant regulatory risk,” Estomin said. “Moody?s has already downgraded BGE a couple of times, citing Maryland?s current political environment. [BGE] is two levels above junk bond.”
On Friday, the PSC will hear closing arguments on the rate hikes.
