MAPSA may not appeal Baltimore court ruling

The Mid-Atlantic Power Supply Association said it is still undecided but leaning toward not appealing a Baltimore City Circuit Court decision that quashed its challenge to deregulation rules negotiated with Baltimore Gas & Electric Co. (BGE) by state regulators. Susan Daycock, spokesperson for MAPSA, said most competitors, including Shell Energy Services, a unit of Shell Oil Co., are already backing away from serving residential or small commercial customers.


Ann de Rouffignac
OGJ Online

The Mid-Atlantic Power Supply Association said it is still undecided but leaning toward not appealing a Baltimore City Circuit Court decision that quashed its challenge to deregulation rules negotiated with Baltimore Gas & Electric Co. (BGE) by state regulators.

�We have 30 days to decide if we try at the Court of Special Appeals or not,� says Susan Daycock, spokesperson for MAPSA. �There are grounds for appeal.�

The trade organization representing big independent electricity retailers challenged in court the Maryland Public Service Commission�s restructuring settlement for BGE. The association said stranded costs or (the value of uneconomic assets in a competitive market) granted BGE were excessive.

MAPSA also said that the default price approved by regulators and charged by BGE would be too low for any competition to occur. Competitors trying to enter the market would have to charge a price under that default price.

The case ended up in the Maryland State Court of Appeals during the summer where a stay was issued prohibiting the state from acting on the settlement. After a month, that judge sent the case back to the Baltimore City Circuit Court for reconsideration. MAPSA lost its case last week.

Daycock indicated the association was leaning towards not pursuing the case any further in Maryland.

�It�s a tremendous amount of money for a market failure,� she says. �Does Maryland make sense when there is Texas, Michigan, or Pennsylvania?�

MAPSA insisted restructuring rules for BGE will not foster competition�especially for residential consumers. Parties that signed on to the restructuring settlement such as the Office of People�s Counsel simply traded competition away for rate discounts in the short run, she says. BGE got excessive stranded costs in return.

Daycock says there is no marketing going on in the state and most competitors, including Shell Energy Services, a unit of Shell Oil Co., are already backing away from serving residential or small commercial customers. The rate freeze that will last from 4-6 years, depending on whether a rate class gives enough of a discount to satisfy customers and keep away competitors, she says.

Some leeway exists for competitors to offer product to large commercial and industrial consumers, Daycock says. Large retailers which supported the restructuring settlement with BGE will just take the standard offer services and wait for competition to develop, says Thomas Gorak, attorney representing Maryland Retailers Association.

�How many companies are prepared to market to residential customers?� says Daycock. �That answer is zero.�

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