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Friday, April 21, 2006

Gov Ehrlich Wins With Utilities & Ratepayers

Governor Robert L. Ehrlich, Jr. succeeded in negotiating a package with Constellation/BGE for Maryland's ratepayers to spread electric rate increases out over a period of years starting with a 19 percent increase instead of a one time 72 percent increase. Rates were frozen by the Maryland legislature in 1999 for utility deregulation and now the utility is attempting to recoup its losses.

Wash Post Article - Energy Deregulation Comes Home To Roost

The framework for rate relief for Marylanders includes:

1) No interest for consumers who choose to participate in the program; 2) Initial rate cap of 19 percent on July 1, 2006; 3) 25 percent rate cap on June 1, 2007, and a transition to market rates by Jan 2008; 4) 85 percent increase over FY 05 of State and federal assistance for low-income families; 5) Opt-in, which will allow customers to affirmatively choose to be in the program.

Consumers may opt to participate in the phase-in or begin paying the 72 percent increase immediately in July. A monthly $15 charge for the deferred payment will be added for two years to the bills of the utility's 1.2 million customers who participate in the plan. Consumers opting for the phase-in would pay about $49 more on the average bill by June 2007 and $63 more a month by January 2008. The average bill will increase from $92 to about $110 in July. It will increase another $4 in January and another $21 in June 2007. It will rise about $10 more in January 2008 to reach market prices.

Customers who opt out of the phase-in program would pay the full 72 percent increase beginning July 1, which would be about $48 more on the average bill. Rates could increase more if market prices continue to rise during the phase-in period.

The Ehrlich administration also made a deal to reduce electricity-rate increases of 39 percent by Potomac Electric Power Co. (Pepco) and 35 percent by Delmarva Power. Those rates will be phased in over a year, with a 15 percent increase in June and a 15.7 percent increase in March. The administration's agreements with BGE, Pepco and Delmarva must be approved by the Maryland Public Service Commission.

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