Delegates said before the session that they planned to push for changes that they believed would make it easier for outside power companies to compete to sell power in a market that is largely dominated by traditional utility companies.

But two proposals that won nearly-unanimous approval in the House fell victim to lingering doubts among key senators about the controversial 1999 deregulation plan, which many blamed for big spikes in power costs in Central Maryland over the past several years.

Senate versions of those bills were killed in a single Senate Finance Committee vote proposed by Sen. E.J. Pipkin, an Upper Shore Republican who has been a vocal advocate of rolling back the 1999 changes. In that same vote, Pipkin scuttled re-regulation measures that he had backed, but stood no chance in the House. That’s where re-regulation died last year, as well.

“Last year, it was the will of the Senate to re-regulate, and the House decided not to [go along],” Pipkin said. “I just thought it was wrong to move choice forward this year just because the House wanted to do it.”

One of the House-passed bills would have required utilities to give competing power companies more information about customers, for use in marketing. Another would have required utilities to help pay for consumer education about how to choose alternative suppliers.

The power market can be confusing even for sophisticated customers, and very few residential customers switched to an energy supplier other than their existing utility. Traditional utilities, like Baltimore Gas and Electric Co., still own the power lines that deliver energy to homes. But under deregulation, they don’t own the plants that produce the power, but can charge for its distribution.

Generation facilities are now held by independent companies (though some, like Constellation Energy Group, are affiliated with utilities). Power marketers can now sell power to customers, who are allowed to shop around for the best deal.

Though many businesses and government agencies have shopped around, few residents have. Most of them still buy power from utilities, which are required to provide default service at a state-regulated price.

Del. Dereck Davis, D-Prince George’s, heads the House Economic Matters Committee and backed several of the open market measures. He said he doesn’t have a problem with the state helping suppliers compete because he believes it would benefit customers in the long run to understand the system better.

“Maybe we shouldn’t be focused on who’s making a buck, as opposed to who’s saving a buck,” Davis said. “It’s incumbent upon us to break it down so it’s as simple as possible.”

Sen. Jim Rosapepe, D-Prince George’s and Anne Arundel, said he didn’t think independent suppliers need any help from the state. The consumer education proposal would have been paid for by charges on utilities, which could have been passed onto customers. The damage would have totaled around $150,000 for next year, which he said was “basically a bailout for big, out-of-state utilities.”

The Public Service Commission has said it can undertake some low-cost options, such as website enhancements, to make it easier for customers to find more information.

For the competitive suppliers, who have organized in the state under the national Retail Energy Supply Association, the debate seems repetitive, after they squeezed out a narrow victory in the defeat of last year’s re-regulation proposal.

“There are choices for customers out there, and it’s essential for us to get beyond this re-regulation versus restructuring debate,” said Jay Kooper, president of RESA.

By Andy Rosen

Technorati Tags: electricity deregulation Maryland

It may come as a shock to some, but electricity is proving to be one of Martin O’Malley’s best allies. As expected, last week’s electricity supply auction allowed Baltimore Gas & Electric Co. and other Maryland utilities to lock in favorable rates over the next two years.

That continues a downward trend that started last year. Maryland consumers will see significantly lower commodity prices for electricity as rates roll back to the lowest in four years. The timing couldn’t be better for the incumbent governor who made a record increase in electricity rates — and Robert L. Ehrlich Jr.’s failure to do much about it — a core issue of his 2006 campaign.

But easily lost in the political rhetoric is that both events — the surge in prices then and the reduction now — were largely due to factors beyond either man’s control. A cap on BGE rates created by a 1999 deregulation law that had kept prices below market levels was expiring when the utility sought the sizeable jump in prices during Mr. Ehrlich’s tenure. More recently, a global economic recession that has greatly reduced the demand for power has pushed down energy prices.

While the candidates can spin these facts any way they want, the reality is that Maryland still has not charted a clear course for the state’s energy future. That’s particularly apparent in the General Assembly where a key Senate committee has expressed interest in re-regulating electricity while their counterparts in the House prefer the state move further toward deregulation.

This much is certain: The Maryland Public Service Commission has become a much more active regulator under Mr. O’Malley, and consumers have benefited both directly (in the form of rebates on their bills) and indirectly (most notably in the $2 billion agreement that spared them the future decommissioning costs of Calvert Cliffs nuclear facilities).

The PSC has proven so aggressive on such issues as Constellation CEO Mayo A. Shattuck’s compensation and the sale of half the company’s nuclear assets to Electricite de France that some were left to wonder if the attitude of Maryland’s governor’s was too harsh. Constellation remains the sole Fortune 500 company headquartered in Baltimore.

Yet with rates falling, the appeal of deregulation has only increased. For the first time, residential customers can find better prices by shopping around. But that’s a trend that might not last beyond 2012, as the U.S. economy gradually recovers and demand for energy increases.

Will Maryland have enough electricity in the future, and should the PSC order utilities to build power plants if they are deemed necessary, a move that would undoubtedly raise prices now but might protect consumers in the long-term? Will enough money be invested by Constellation and others in renewable forms of power or in conservation? And how might all of this be affected by climate change legislation pending in Congress?

Those are the questions that Maryland’s gubernatorial candidates need to answer. The prices consumers pay for electricity today are not guaranteed forever. Instead of rehashing the ups and downs of the past (and perhaps even the present), voters need to hear what plans Mr. O’Malley and Mr. Ehrlich might have for the state’s uncertain energy future.

Copyright © 2010, The Baltimore Sun

Technorati Tags: electricity deregulation Maryland

Governor O’Malley is asking the Public Service Commission to require that new power be delivered in the state at controlled prices.

The governor says that a deregulation policy that went into effect back in 1999 did not reduce electricity prices or offer a dependable energy supply.
There is no word if state regulators will take the governor’s advice.

Opponents say if regulators require utilities to build new plants rate payers would be the one paying the cost.

Technorati Tags: electricity deregulation Maryland