Homeowners beware: Another energy rate increase might be on the way.
But that increase isn?t for the energy itself, state officials say, and Baltimore Gas & Electric?s profit picture isn?t as simple as it seems.
While no official process has begun, BGE may seek an increase in the distribution fee it charges customers, said Bill Fields, a senior assistant counsel with the Office of People?s Counsel. That fee concerns the physical poles and wires that bring power to a customer?s home, rather than the electricity itself.
BGE doesn?t make the kind of profit some of its irate customers think it might ? but its parent company, Constellation Energy, does.
BGE saw a decline in profits last year, with shares falling 14 cents from $1.01 per share to 87 cents, thanks to mild weather and higher operating expenses, according to Constellation?s 2006 year-end report.
Meanwhile, Constellation stock earnings for the year jumped 25 percent, to $3.61 per share from $2.89.
“The majority of Constellation?s revenue doesn?t come from BGE, but well outside the state of Maryland,” Constellation spokesman Robert Gould said. Gould said holdings in California and Texas were among those driving the company?s profits.
Earlier this year, Gov. Martin O?Malley asked the Public Service Commission to look into the two companies? profits. PSC spokeswoman LaWanda Edwards said Constellation has complied with subpoenas for information, and no impropriety has been found.
Since 2000, BGE?s power-generation facilities have been owned by Constellation, and BGE must bid out the power it provides to customers. So while Constellation joins as many as a dozen other bidders to supply BGE, and can make whatever the market allows, BGE can only make what the PSC allows.
“That?s really the issue ? Constellation energy sells the electricity, BGE bids on it,” said Mary Ellen Vanni, executive director of the Fuel Fund of Maryland. “BGE gets a bad rap for this. Constellation can sell [energy] at whatever the market can bear.”
By law, BGE cannot charge an added premium when it sells that energy to the customer, Fields said, though lawsuits on the issue are pending.
Maryland?s energy industry now faces the question: What is the best long-term energy policy? Should utilities such as BGE own or reclaim their own generation facilities? Would longer-term contracts stabilize energy costs?
Vanni said consumers might benefit if BGE no longer had to buy electricity from Constellation.
“If I make spaghetti sauce at home,” she said, “it doesn?t cost as much as if I go buy it from someone else.”
Fields said his office seeks a comprehensive planning process to look at these questions over the next few years, and the answers likely will come slowly, and in steps.
Meanwhile, BGE customers continue to face high energy bills and hope for a solution.
