SENATE OF MARYLAND
ANNAPOLIS. MARYLAND 214O1-1991
It's dangerous to stand in the way of progress. Sometimes it'll run right over you on its rapid path to the future. Change for change sake often seems inevitable. "We've always done it this way," seems like an argument that is destined to lose. Sometimes I am sure you feel like you are the last to know of the most recent development only to find that development outdated. The electric utility industry is the latest to find itself in the center of a twister. What will come out is anyone's guess.
The Maryland Public Service Commission (PSC) recently issued an order which would allow customers to pick their own electric company. That same order caps prices, leading to the conclusion that what we have here is really not deregulation. At a recent forum on the issue conducted by the Calvert County League of Women Voters (LWV), Delegate George Owings called what was happening "electric utility restructuring."
Delegate Owings is a member of a task force which will be issuing its assessment of the PSC order. That report will go to the Maryland General Assembly for consideration in the upcoming session. While the PSC order said that this change should occur as early as April, 1999, Del Owings doesn't believe it's going to happen that fast. That's because he believes his task force won't be able to come up with a consensus on major issues. "It's too complex and has too far reaching consequences," he said.
Indeed someone being introduced to the subject for the first time can be left with their head reeling from foreign jargon such as unbundling, kilowatt hours and aggregating. And the particularly pertinent question is how will this affect the average residential customer of electricity. The short answer is that no one knows for sure. Optimists say everyone will benefit. Pessimists say the small guy will lose. Regulators say the residential customer at least won't be paying any more than they do now. The big push for this change seems to be coming from the large retailers. Thomas Saquella, president of Maryland Retailers Association, says grocery stores particularly are at the mercy of high utility bills and would most benefit from competition. But he says the small retailers will also expect to see significant savings.
Where does Southern Maryland Electric Co-op fit into this picture? Since they in a sense are us, since we all own it, this is a very pertinent question for me as a legislator. The proposed restructuring would allow electric customers to choose any generator of electricity. but the owner of the transmission and distribution system, in our case SMECO, would remain the same. SMECO doesn't generate it's own electricity, it buys from Potomac Electric Power Company. Under these changes anyone could buy from any supplier just the same as you can pick any long-distance company. You would get one bill, but part would pay for generating and part would pay for transmission and distribution. That all could go to SMECO or part could go to someone else. So SMECO could lose revenue but also could dump some of the expense of buying electricity. It's hard to predict the net result for them and ultimately for us.
Confused! Many people to this day wonder if we really are better off with telephone deregulation. We get bombarded every day with sales pitches asking us to switch long distance companies. There are so many companies that it's virtually impossible to reach an educated decision as to which is the cheapest and provides the best and most reliable service.
Maryland People's Counsel Michael Travieso told the LWV attendees that his office would be active in educating the public about options for electric service. Yet exactly where is his office now in helping us understand long-distance deregulation?
There is one other important issue for our area. Calvert County gets one-fifth of its property tax revenue from the BG&E Calvert Cliffs plant. If in the restructuring the plant is devalued, Calvert could get less revenue. One major issue in the discussion to date is what to do with lost revenue intended to pay for plant debt service. This revenue was anticipated and the money has to come from somewhere. Likely customers will still have to pay for that debt service even though BG&E isn't supplying them with electricity.
Some people say this is inevitable. Some states have already done it. Legislators on Capital Hill may mandate it. But I for one want to urge caution on this issue. It hasn't been proven to me that Marylanders will benefit. Our rates are already on the low side compared to the national average. If we are going through this major disruption with little or no savings except for a few large businesses, then it is hardly justified.
What do you think? Let me know between now and when the session starts on January 14th. Write to my district office at P.O. Box 229, Great Mills, MD 20634 or call there at 301-994-2826 or to my Annapolis office at 1-800-492-7122, extension 3673.