Saturday, March 07, 2009

Maryland Might Re-Regulate Electricity Per High Costs

Maryland Governor Martin O'Malley is considering the introduction of legislation to re-regulate electric utilities in response to significant increases in ratepayer bills. His plan would allow the state to regulate future power plants if such a move is determined to be in the best interest of customers.The proposal also would allow the state to decide when new plants are built, usurping that authority from utilities. WOW. Talk about re-regulation. This is scary. It also represents botched deregulation whereby wholesale rates were deregulated but retail rates were not in some states and rates were frozen for about ten years in Maryland. Now Constellation and PEPCO had to raise rates to catch up. Future rate increases will be needed to build new plants and to fight global warming.

AAEA opposes re-regulation because it represents governments reneging on breaking up utility companies (separating generating and distribution) as the price for deregulation. Re-regulation would also represent a failure by utilities because they prevented real competition by blocking outside companies from competing effectively. Yet if designed and implemented properly, deregulation would have worked. But in this current era of anti deregulation, we accept the fact that the utilities will probably be re-regulated.

Now Maryland is 'in a pickle' because higher consumer bills and an electricity supply shortage that could lead to rolling blackouts as soon as 2011. Constellation Energy Group (parent of Baltimore Gas& Electric), continues to support deregulated, competitive energy markets. Constellation also wants its proposed third nuclear reactor at Calvert Cliffs exempted from any re-regulation. The company also opposes more sweeping re-regulation bills introduced earlier in this legislative session. ( (Image: State of Maryland Flag)

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