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BG&E Rate Hike Solution Reached

Posted By Jim On 06/15/2006 @ 1:49 pm In Government,The Home | 8 Comments

Final resolution: On July 1st, the energy rates will only increase 15% (instead of 72% to market rates) for the remainder of the year and all the members of the Public Service Commission will be fired. Also, Maryland residents will be paying full market rates starting January 1st, 2008 (instead of June 30th, 2008) and the bill that passes has enough votes to override an Erhlich veto.

The plan passed by the state General Assembly for BGE area customers calls for a two-year phase-in of the rate increase, with an initial 15 percent rise in rates next month paired with a 10-year customer repayment plan. There is no opt-out provision for deferring the increase until next June. (news link [3])


This plan still is a deferment plan because you still need to pay a net charge of $2.19 on your bill until next June (when you are able to opt out) but it’s in your interests to do so. If you had the option to choose, would you choose to take the 72% rate hike now or take only 15% put pay an extra $2.19? You certainly would take the 15%+$2.19 unless your electricity bill was four dollars (that’s about the breakeven point).

Assuming no increase in the $2.19 monthly charge, customers would pay a total of $262.80 in fees over 10 years for the deferral. But they would receive an average of $47 credited to their bills for the next 11 months, worth about $517. Constellation would absorb the difference.

Ultimately, I think the best part of this deal is the firing of all those goons in the PSC. This situation shouldn’t have lasted until the eleventh hour, after over 10% of the customers of BG&E had opted out of a crappy program that only hamstrung low income families into owing more, and hopefully whoever gets on the PSC will handle situations like this better.

via Baltimore Sun [4].


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[3] news link: http://www.baltimoresun.com/news/local/politics/bal-te.bz.interest15jun15,0,2177968.story?coll=bal-home-headlines

[4] Baltimore Sun: http://www.baltimoresun.com/news/local/politics/bal-te.md.rates15jun15,0,431486.story?coll=bal-home-headlines

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