Baltimore court upholds deregulation proceedings for Baltimore Gas & Electric

Baltimore Gas & Electric can go forward with restructuring rates to consumers because a Baltimore Circuit Court judge upheld a settlement agreement with the Maryland Public Service Commission that had been challenged in court by would-be competitors.

Sept. 24, 2000

2 min read

Ann de Rouffignac
OGJOnline

After being challenged in court, Maryland Public Service Commission�s electric restructuring settlement with Baltimore Gas & Electric is set to go forward. Wednesday a Baltimore City Circuit Court Judge upheld the PSC�s approval of the settlement and the transfer of BGE�s generation assets.

Parties who had negotiated and signed on with the PSC on the restructuring were solidly behind the Circuit Court�s decision.

�We thought it (the settlement plan) was a reasonable accommodation,� says Thomas Gorak, an attorney with Gorak & Bay of Baltimore, Md. �Competition will develop over the next few years.�

Gorak represents large and small retailers who are already shopping for alternative energy suppliers, he says. If that doesn�t work out, retailers can just accept the standard offer price as guaranteed in the settlement, he says. A rate freeze is in place for commercial and industrial customers that will last 2 years.

But other critics say this settlement will not promote competitive choice for residential electric customers. The settlement provides for a standard default price of electricity for residential consumers that will be too low to compete with, maintains the Mid-Atlantic Power Supply Association. The freeze for residential customers includes a 6.5% decrease from current rates that will last 6 years. The prices provided by the settlement agreement don�t provide enough incentive for new competitors to come in and offer electricity on the retail level, according to MAPSA.

MAPSA did receive a stay of the restructuring plan on July 1 from the Court of Appeals of Maryland. That stay was lifted by the Maryland Court of Appeals on July 20 and the entire matter was sent back to the Baltimore Circuit Court for further proceedings. Two months later, the circuit court judge issued a 25-page report upholding the PSC�s decisions.

It is not known yet whether MAPSA or other parties will seek any further appeal. Calls to MAPSA and one of its biggest members, Shell Energy Services, were not returned.