BALTIMORE- With a planned 72 percent increase in electricity costs coming to Baltimore Gas and Electric Co. customers over the next two years, religious leaders and advocates for energy assistance went on the attack Friday as Maryland’s chief utility regulator defended the state’s plan to deal with the rise in prices.
At a conference on energy and poverty sponsored by the University of Maryland, Baltimore County, Maryland Public Service Commission Chairman Kenneth D. Schisler told the audience of around 75 that putting caps on the price of electricity in 1999 had been a bad idea to begin with, since the additional costs had to be paid off eventually.
“It’s kind of cruel,” he said. “Eventually, the situation meets a breaking point.”
Schisler explained the commission’s plan to defer the initial cost of the price increase over two years, with customers initially paying only an additional 21 percent for service when the caps are lifted in July. Customers would also pay 5 percent interest on the deferred cost, which Schisler described as essentially a loan from the utility company.
Prices for BGE customers would be raised gradually over the two-year period – three for low-income households – with most of the increases scheduled for the lower-usage spring and fall months.
Mary Purvis, a family services coordinator who helps people obtain energy assistance at St. Ambrose Outreach Center in Northwest Baltimore, criticized the commission’s plan, saying that energy companies’ record profits show that they are already making too much off their customers.
“We are being ripped off,” she told Schisler. In an interview, she called the plan a “scam” and said that both federal and state officials “are looking the other way.”
Schisler called equating record profits with price gouging a “tenuous connection,” saying that BGE makes about 8 percent in regulated profit on its annual revenues. He said that if gouging is occurring, “They should throw those rascals in jail.”
It would be “legally confiscatory,” he said, not to provide payment to companies so that they can cover the costs of the deferral.
Pastor Curtis R. Gorham of Kerygma Ministries asked why no state legislators were present at the conference to discuss alternative solutions. He also argued that the total profit of the parent companies of utilities far exceed the 8 percent in regulated profit Schisler referred to.
“It’s a monopoly,” he said. “What are you going to do to take care of all of us?”
Schisler responded that there is not anything a state regulator can do about those companies – they can only oversee the utilities themselves.
Prices in counties serviced by Pepco in the Washington area and Delmarva Power on the Eastern Shore will increase by between 35 and 39 percent over the same period even without the caps as an issue, Schisler said.
Baltimore City Councilwoman Mary Pat Clarke told the audience during her remarks that her constituents’ situation is similar to a Februrary 1977 crisis in which a number of people had their water and heat knocked out when the frost line dipped below the underground water line.
“You know, February 1977 wasn’t so bad after all,” she said. “This affects everybody.”
Clarke said that the coming increase may have an effect not only on the needy, but the organizations that provide help. “Churches will be forced to close and nonprofits to shut their doors,” she said.