MD Electricity Price to Increase 72% on July 1st
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.
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There are 8 comments, add your thoughts now!
Time to bust out the fluorescent bulbs.
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.
I would like some info on the $500 million (+-) that was set aside by the State to protect BG&E from deregulation losses, which I understand was never needed because BG&E prospered well during this time.
Does BG&E now owe this money back?
Thanks,
Bill Parsons
Hello. I am with PowerMax Energy in Dallas, Texas. Beginnning July 1, we will be able to provide Maryland consumers with choices for their electricity provider. If you would like further information (and you should) please contact me.
Thank you.
Scott Bertrand
Good Day to all of you in Maryland. I live in suburbs of Dallas, TX. Our local provider also raised their rates 86 % since 2002. In May 2006, our local provider posted 574 M just for the first quarter. Meanwhile many families are sacrificing daily necessities so that we can be able to pay our electricity bill. I joined Powermax Energy because I was tired of paying higher electricity bill and at the same time I can help friends and family save money on their electricity bill. Beginning July 1, 2006 we will be able to help you save money. We offer savings on your residential and commercial accounts. You can also take advantage of helping other people by joining our team. Contact me to take advantage of this great opportunity.
Have a great day!
Ofelia Melendrez, 3002
Just got my bill for 230$….
this blows!
Does anyone know what BG&E charges per killowatt?
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