Maryland court stay complicates deregulation
Electricity consumers in Maryland will have to wait a little longer to choose a power supplier under a program which was scheduled to start this July 1.Electricity providers other than the incumbent utility, Baltimore Gas & Electric Co., succeeded in getting a stay from the Maryland State Court of Appeals to implement deregulation in the state. BGE filed an emergency motion for reconsideration June 30 asking the court to reconsider its delay of the competitive market in Maryland.
Electricity consumers in Maryland will have to wait a little longer to choose a power supplier under a program which was scheduled to start this July 1.
Electricity providers other than the incumbent utility, Baltimore Gas & Electric Co., succeeded in getting a stay from the Maryland State Court of Appeals concerning the implementation of deregulation in the state.
The would-be electricity competitors claimed that the default price charged by BGE was simply too low for any meaningful competition to take place. The default or standard offer price is what the utility would charge consumers who don�t choose to switch suppliers. Competitors trying to enter the market would have to offer a price lower than the standard offer price in order to attract customers.
The MidAtlantic Power Supply Association (MAPSA) contended the standard offer prices would have to be increased to get other participants to enter the market.
BGE planned to implement deregulation July 1 under a program approved in the fall of 1999 by the Maryland Public Service Commission with various consumer and business groups signing on.
The conflict between would-be competitors and the incumbent utilities over prices charged to consumers who don�t choose to switch electric suppliers has been complicating the deregulation process in a number of states. Problems have emerged in Pennsylvania, Arizona, and Texas as these states have set deregulation schemes into motion.
Critics say that the standard offer prices or�price to beat�as it is called in other states is set too low for meaningful competition. Utilities say that competitors are only whining about profits and the prices are sufficient to usher in competition.
BGE filed an emergency motion for reconsideration with the Maryland State Court of Appeals June 30 asking the court to reconsider its delay of the implementation of the competitive market in Maryland.
The utility says that the settlement agreement to launch competition into its service territory was reached by the various parties in Maryland after two years of negotiations, legislative consideration, and public hearings. Part of this agreement included a 6.5% rate reduction for BGE�s residential customers.
Parties that joined in the settlement included Enron Corp., the Office of the People�s Counsel, staff of the PSC, Maryland Energy Administration, Maryland Industrial Group, Maryland Retailers Association, and a several large electricity consumers.