WP: Energy Deregulation Comes Home to Roost

[Pirate Smile]

Energy Deregulation Comes Home to Roost

By Steven Mufson
Washington Post Staff Writer
Tuesday, April 25, 2006; Page D01

BALTIMORE -- For almost a year, they regularly faced each other across tables set up in concentric squares in a lecture hall at Baltimore Gas & Electric's offices. With hundreds of millions of dollars at stake, dogged negotiators represented more than a dozen groups, including BG&E itself, the state legislature, the Office of the People's Counsel and big electricity customers like Johns Hopkins University and major industries.

Their goal: to deregulate Maryland's utility industry to make it more efficient and competitive. When they reached an agreement on June 29, 1999, they all shook hands and called it a deal.

Some deal. Nearly seven years later, the same groups have been waving fists, not shaking hands, even after the accord to phase in rate increases that Gov. Robert L. Ehrlich Jr. struck on Friday. More than half of Maryland households, including those in Anne Arundel, Howard and part of Prince George's counties, still face sharp hikes in their electricity bills. Maryland politicians, many of whom have received contributions from the utility, face voter ire in an election year.

-snip-
Other states are bracing for similarly bruising battles and trying to think of ways to avoid them. Virginia, Illinois and Ohio, like Maryland, made deals years ago that froze household electricity rates at levels far below current market rates, but the freezes end soon. In Virginia, a "fuel cost adjustment" will hit consumers next year, and rates will be deregulated starting in 2011.
Homeowners in some states have already taken hits, including hefty rate increases for Pepco customers in Maryland and Delaware, and an 80 percent increase for customers of Texas' biggest utility.

http://www.washingtonpost.com/wp-dyn/content/article/2006/04/24/AR2006042401305.html

[Pirate Smile]

1. more:

"But the company's success amid sharp increases in energy prices has focused debate over whether utility deregulation has worked. "We were told that this would benefit consumers. We were lied to. This was always about power companies breaking free from regulation to make much, much more money," said Tyson Slocum, director of the energy program at Public Citizen.

Regulation of the utility industry dates back to the Depression. Spurred by financial scandals and the fact that just three holding companies controlled 45 percent of the electric power generated in the United States, Congress adopted the Public Utility Holding Company Act in 1935. To prevent utilities from speculating with ratepayers' money, the act barred utilities from doing business across state lines. The result was localized utilities that did everything from run power plants to bill households, with regulated returns on investments in the country's power infrastructure.

In the 1980s and 1990s, many analysts argued that the industry had become inefficient, thus hurting consumers. Some big industrial and commercial customers believed they could get cheaper rates by buying power from firms other than the local utility.

-snip-
Residential customers, however, are just getting plugged into this new world, and they're feeling rate shock. To supply them, BG&E held auctions in January, February and March. The company says 16 firms submitted bids and that it chose several. Constellation says it was one of those bidders. The identity or other bidders or amount bid has not been disclosed, but Constellation is one of the biggest suppliers in the PJM network. Other bidders could be investment banks that trade energy but don't operate any plants.

[Ecumenist]

2. Bu-but it was supposed to keep things good

plenty o'gas for everyone, even pinko commie types like us... LOL!! We tried to tell them...
Now it will be a hard row to hoe for the majority of the right wing---UNLESS, they happen to belong to the high income, petro-gangster club...