The rate compromise Gov. Ehrlich crafted with Constellation Energy Group over utility prices feels good now.
But it?s not a solution.
It?s more like a nicotine patch.
It weans us into higher electricity rates, which kick in January 2008. But only if you opt into the program. Otherwise, cold turkey is the default alternative, which means electricity rates will go up 72 percent on July 1.
Choosing the plan means seeing rates rise 19 percent July 1 instead of 72 percent.
So opt in when you can. The deal has not been approved by the Public Service Commission, so at this point it?s just a plan. If the PSC approves the plan, Constellation, the parent of Baltimore Gas & Electric Co., will run ads to show you how. So will the state, with taxpayer money. But you will still have to pay interest on the deferred costs ? and possibly an even higher bill than expected come January 2008.
This is a Band-Aid for the wound the General Assembly created by voting for the 1999 “deregulation” legislation that capped electricity rates at 6.5 percent below 1993 levels.
Since that time, a surge in demand from developing countries combined with supply disruptions caused by Hurricane Katrina have sent prices up.
But Maryland customers would not have known. It?s as if we have been living in a cocoon.
The compromise at least gives us time to figure out how to manage our emergence into the real world. This situation must be a lesson for the state legislature. Deluding people may win votes in the short term, but it will not bend the world economy to the will of Annapolis.
