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CAPPING UTILITY COSTS
COSTS OF HOME HEATING

Annapolis Anticipates Skyrocketing Utility Rates

Utility Rate Cap To Expire In July

POSTED: 4:51 pm EST February 10, 2006
UPDATED: 7:18 pm EST February 10, 2006

First it was gas and oil; now, you'll be paying more for electricity -- but by how much?

WBAL-TV 11 News reporter David Collins reported lawmakers have growing concerns that consumer bills could skyrocket by as much as 80 percent when a statewide cap on utility rates expires on July 1.

Delegate Patrick McDonough, R-District 7, who represents portions of Baltimore and Harford counties, has proposed a pre-emptive strike, of sorts, in legislation to impose new a cap on utility rates -- and he has at least 50 co-sponsors.

"Frankly, they are talking about 50 to 80 percent increases in electric," McDonough said.

Since 1999, Baltimore Gas and Electric customers have benefited from a cap on electric rates. The General Assembly passed the cap in response to deregulation.

McDonough hopes to forestall an impending electric shock, pushing his bill to again cap utility rates and only allow BGE to increase rates by 5 percent per year.

"This bill has attracted more than 50 co-sponsors, both Democrats and Republicans around the entire state," McDonough said.

BGE representatives recently testified in opposition to caps during a briefing before the Senate Finance Committee. They claimed customers have been paying artificially-low prices, an argument that caught the attention of the Maryland Public Service Commission, which regulates public utilities in the state.

PSC Executive Secretary Ray Bourland recently wrote a letter to the board members, stating that an "indefinite continuation (of caps) could compromise reliability of service and ultimately compromise public safety and the economic welfare of Maryland."

Still, lawmakers anticipate trouble for consumers.

"People can't afford that," McDonough said. "There's no way people can survive those devastating increases."

In a letter to the Public Service Commission, Gov. Bob Ehrlich urged members to "take any actions necessary ... to mitigate customer impacts from dramatic increases."

The PSC staff is currently working on recommendations to include phasing in rate increases. Meanwhile, McDonough predicts the caps will become a campaign issue if the caps come off.

"People aren't going to be talking about gay marriage, they aren't going to be talking about slots. In a big election year, they are going to be saying, 'What have you done to protect me? Look at this gas and electric bill,'" McDonough said.

Collins reported the anticipated amount of a rate increase would not be known until the spring, when BGE buys power at auction.

Stay with TheWBALChannel.com and WBAL-TV 11 News for the latest Session 2006 updates.


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