O’Malley Promised to “Stop the Rate Hikes” Seven Years Later Rates Still Going Up
Millions of Maryland electricity ratepayers will see their rates increase next month. The Maryland Public Service Commission approved an $80 million rate increase requested by Baltimore Gas & Electric. The increase will add $3.33 to monthly electric bills. The PSC also approved a $32 million rate increase for gas distribution. The rate increase took effect over the weekend.
Maryland’s second largest utility PEPCO, applied for $60 million rate increase in November, after receiving smaller than requested increase in July.
This latest BGE rate increase comes on the heels of Governor O’Malley’s offshore wind proposal advancing in the Maryland House of Delegates. O’Malley’s says his plan would add $1.50 to monthly electric bills in order to subsidize construction of wind turbines off the coast of Maryland. In reality, the cost to ratepayers will be significantly higher.
These rate increases and the ratepayer subsidies for oceanic wind farm contrasts starkly with the O’Malley who, first campaigned on the specific promise of lowering electric rates.
During a 2006 televised debate with his opponent former Governor Robert L. Ehrlich, O’Malley stated
As Governor I am going to appoint competent, qualified, professional regulators to the job so that we actually have a hearing to determine what is the fair and reasonable rate that BGE can charge us for this commodity they buy. That did not happen in this case. There is no clearer issue that separates my governing philosophy from the governor’s than this one I will stand with the, rate payers, consumers, and working people of our state, he will always side with the powerful wealthy energy interests and utility lobbyists… The only guarantee we have is that if you [Ehrlich] get reelected we’re all going to be paying a lot more for energy.
Seven years later and one reelection victory later, Maryland electric rates are 54 percent higher than when he first took office. Rates decreased over the last two years because of a drop in demand due to the recession, not O’Malley’s policies.
One policy particular, EmPower Maryand, O’Malley’s plan to reduce per-capita energy consumption 15 percent by 2015, has added surcharges to monthly bills. The law allows utilities to pass on to customers the costs of implementing EmPower Maryland mandates.
One regulation in the law, bill stabilization or decoupling, literally allows utilities to charge customers for power they did not use. For example, under O’Malley’s decoupling regulations, PEPCO charged customers for power they didn’t use by a severe derecho, last June. In 2011, through bill stabilization, PEPCO charged charged customers for power they didn’t use while suffering through outages caused by a massive snowstorm.
Furthermore, a report released by the Maryland Public Interest Research Group found that utilities are likely to miss EmPower Maryland goals by as much as 52 percent.
