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MD Electricity Price to Increase 72% on July 1st

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On July 1st, 2006, my electricity provider, Baltimore Gas & Electric (BG&E), and other electricity providers in Maryland will no longer be subject to price caps on their SOS (Standard Offer Service) and can charge the market rate for electricity. Electricity in Maryland was deregulated over four years ago in an attempt to lower electricity prices by introducing competition and it appears as thought it will backfire because it’s been predicted that Maryland electric rates will surge (ignore that pun) 72% on July 1st. Mapgirl’s post on the subject reminded me of a discussion among my co-workers about how electricity prices are going to skyrocket.


Certainly, some would say that this price increase is overdue because the prices have been kept artificially low by the government, a point I wholly agree with. However, it’s a situation created by the government and not by the consumer (you can argue that the consumer elects the official, but whatever), who is largely ignorant of the fact that electricity prices should have been increasing the last four years; and so the government should try to soften the blow.

One idea that has been floated in the legislature is a plan to phase in price increases over three years, with this summer’s bump capped at 15% (Baltimore Sun). The justification for this, and it’s a good one, is because consumers have been paying for anticipated depreciation on BG&E facilities that never materialized (considered a stranded cost)!

So far, the Public Service Commission has approved one plan that would help consumers:

Last week, the PSC approved a plan that would automatically defer all but 21 percent of customers’ increased bills for two years but force them to pay 5 percent interest on the difference. Customers would be able to opt out of the plan.

Personally, I would opt out of that plan because I have enough funds to cover the hikes but this is a very important solution for those low income families to weather the storm if the rate caps aren’t approved.

Right now, the only reaction consumers have at this point (other than waiting and hoping) is to put that deregulation to use and start shopping around for other electricity providers. I live in Howard County, which is serviced by Baltimore Gas & Electric (BG&E), but according to Maryland’s Public Utility Sources I can switch to one of twenty other providers (link).

If my bill goes up 72% as expected, then I’ll probably be looking at a $200+ electricity bill (based on last year’s summer bills) and that would really put a damper on the ole budget.

{ 11 comments, please add your thoughts now! }

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11 Responses to “MD Electricity Price to Increase 72% on July 1st”

  1. CK says:

    Time to bust out the fluorescent bulbs.

  2. mapgirl says:

    Thanks for reposting. I don’t hear the rate hike buzz in VA, so I guess Dominion Power doesn’t have one coming up. I think that it’s great you can cover the jump, but the best thing is definitely helping the low income folks that can’t afford a jump at once.

    I heard something on the radio that really made me flip out this week. The gov’t in MD wants to allocate more money for low income heating assistance. I’m sorry, why not just transfer that money over to Constellation Energy’s bottom line and keep rates low? Sounds like the same thing to me.

    I think the government of Robert Erlich’s got it all wrong. They really need to put that money forward to help folks make their homes more energy efficient, not help them pay the bill. The long term fix is to make sure the windows are fixed, the roofs don’t leak, and the insulation is sound, not just pay out more money. Sorry to get all political sounding in a comment, but I really think there is a better way to control the cost. If the gov’t is willing to spend all this money, they need to allocate it the right way. Control the amount of electricity/gas being consumed and then you control the cost. I don’t understand why they’d want only to control the cost.

    It’s been bugging me for days since I heard it this week.

  3. Bill Parsons says:

    I would like some info on the $500 million (+-) that was set aside by the State to protect BG&E from deregulation losses, which I understand was never needed because BG&E prospered well during this time.

    Does BG&E now owe this money back?

    Thanks,
    Bill Parsons

  4. Hello. I am with PowerMax Energy in Dallas, Texas. Beginnning July 1, we will be able to provide Maryland consumers with choices for their electricity provider. If you would like further information (and you should) please contact me.

    Thank you.

    Scott Bertrand

  5. Ofelia Melendrez says:

    Good Day to all of you in Maryland. I live in suburbs of Dallas, TX. Our local provider also raised their rates 86 % since 2002. In May 2006, our local provider posted 574 M just for the first quarter. Meanwhile many families are sacrificing daily necessities so that we can be able to pay our electricity bill. I joined Powermax Energy because I was tired of paying higher electricity bill and at the same time I can help friends and family save money on their electricity bill. Beginning July 1, 2006 we will be able to help you save money. We offer savings on your residential and commercial accounts. You can also take advantage of helping other people by joining our team. Contact me to take advantage of this great opportunity.

    Have a great day!
    Ofelia Melendrez, 3002

  6. tiffani says:

    this blows!

  7. Fay says:

    Does anyone know what BG&E charges per killowatt?

  8. Nick says:

    My company has teamed up with Washington Gas Energy Services (WGES) to help people lock-in their electric bills at a lower rate. Long story short, energy has become “deregulated” and you don’t have to buy your electricity from your current Electric Company. You now have the opportunity of shopping your electricity cost… not all the taxes, fees and other stuff on your bill, just the “usage charge”. If the usage or delivery charge is lower somewhere else, you are allowed to have that electricity sent to your house. Nothing changes for you except your rate charge for your usage. Through our current marketing agreement with WGES, we are saving our family and friends between 10%-20% on the usage cost of their electricity bill. Your utility company stays the same, your billing stays the same, and you don’t need to notify anyone or do anything to make this happen. It takes about 3 minutes, and I have done it and I am trying to sign up as many friends, families, and clients that I can. Someone did it today who lives in Montgomery County and he’s going to save about $1300 a year. That is some serious savings.

    WGES has given us a “special promotional code” for the time being that gives us an even better rate then if you did it without our code…. It is APS-304. You can go directly to the WGES website….www.wges.com. or our website listed below. My promotional code must be used to get the lower rate.

    Promotional Code is APS-304

    http://www.alliedpowerservices.com

    The only thing you need is your current account number from your existing bill. If you do not have ot our site lists the phone number to call.

    • rothschild says:

      “Allied Power Services” is an incessant spammer and (most likely) operating some sort fo criminal enterprise.

      • eva says:

        Hello,

        why do you say that? I am just curious. I bumped into their website and was considering signing up, but I could not find ANY reviews on the web about them good ones or bad ones… I find that strange… This is the only comment I found.

        Thanks


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