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The power of choice

March 24, 1999

Residents of Hagerstown, Williamsport and Thurmont will apparently get a pass from whatever sort of electric-supply deregulation legislation is produced by the Maryland General Assembly this year. Folks outside those municipal boundaries, however, should pay close attention to what comes out of Annapolis in the next few weeks.

The municipalities exempted from the legislation are three of five Maryland cities that own their own utilities. Though two of those, in Berlin and Easton, still generate some power, most purchase the bulk of it from larger suppliers, and are now using their customer base to negotiate for lower prices.

For those not served by one of the five municipal utilities, a bill currently before the legislature would give consumers a choice of suppliers, with one-third of the state's electric consumers being phased into the competitive environment every year for three years, starting in the July 2000. Those who don't choose will stay with existing suppliers.

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Concern that those customers who don't choose might not reap any of the savings of deregulation has brought another proposal from state Sen. Brian Frosh and Del. Leon Billings. The Montgomery County Democrats want to allow county governments to act like municipal utilities and put together groups of customers to do wholesale power purchases. One critic of that plan, however, worries that the counties will keep some of the savings for themselves.

In our view, deregulation that substitutes one sort of monopoly for another is deregulation in name only. And the idea that a government that's never negotiated a power purchase before could get the best deal seems unlikely.

A year ago, Glenn Ivey, chairman of Maryland's Public Service Commission, came to Hagerstown and talked about the ways Marylanders might band together to buy power. Ivey talked about the possibility that companies offering other services (like insurance, for example) might give their customers access to cheaper power as an incentive to stick with the firm. If such possibilities are ruled out before there's a thorough look at what good (or harm) they might do, why bother with deregulation at all?

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