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BGE affair a wake-up for county lawmakers

June 23, 2006

Though Maryland Gov. Robert Ehrlich's decision on whether to veto a bill to mitigate a 72 percent power rate hike proposed by the Baltimore Gas & Electric Co. doesn't affect local citizens' rates, it does provide them with something valuable.

Unlike BGE's customers, whose state representatives seemed clueless until the proposed increase was announced, the controversy has been a giant wake-up call for those who represent constituents served by Allegheny Energy.

We hope they spend the next two years crafting a workable solution.

When electricty deregulation was passed in 1999, the bill included provisions for the phase-in of free-market rates. Allegheny Energy customers' rates were capped until 2008.

Given Allegheny's financial difficulties in recent years, we don't expect the utility to willingly return to the sort of regulation that existed prior to 1999.

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It might not even be possible, because the deregulation bill required utilities to divest themselves of their generating facilities and confine themselves to the purchase and distribution of power. It would be difficult, if not impossible, to force that genie back into the bottle.

But it would not be impossible for the legislature to pass a law that would allow counties and municipalities to negotiate bulk purchases on behalf of local customers.

Governments are currently prohibited from that kind of activity and the utilities have so far opposed giving them that right.

When that was first proposed in 1999, some Montgomery County Democrats expressed concern that governments would keep some of the savings for themselves. Of course they would; there would be costs involved in researching and negotiating power contracts.

Another possibility, raised by Glenn Ivey, then chairman of the state's Public Service Commission - and legal under the 1999 law, according to him - would allow companies such as insurers to purchase power in bulk for their customers as one more benefit of doing business with the firm.

All of these options were discussed seven or eight years ago, but little or nothing has happened. It's time for local lawmakers to revisit the possibilities, before an unpleasant surprise arrives in 2008.

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