O'Malley's Failed Energy Policy - Electric Rates Now Astronomical 2-27-09

Governor O'Malley has admitted failure to deliver on his campaign promise to "roll back" the electricity rate hikes.  (For a reminder - click here) 

In an interview earlier this month with Len Lazarick of the Baltimore Examiner, O'Malley said, "On the BGE thing, I did publicly say I wish I could have succeeded [in reducing rates]. I didn't. I failed there." (This article is no longer on the Baltimore Examiner website but it has been reprinted verbatim at click here)

This month, frustrated consumers have deluged the Public Service Commission (PSC) with complaints about exceedingly high electric bills this winter.  After a PSC hearing yesterday, media throughout the state has been dissecting various reasons for these spikes in energy - greater percentage of hours less than 30 degrees, longer holiday vacations, new electronics with high energy usage, etc.

Lost among the chatter is the real reason for the high bills in the Baltimore region.  In May 2008, the Public Service Commission (with four of the five members newly-appointed by Governor O'Malley) approved a 50% rate hike for Baltimore Gas & Electric Co. (BGE).  Obviously, January 2009 was the first major cold-weather winter month after the O'Malley Administration rate hikes.

What does the future portend?  Energy analysts predict that reduced commodity costs could bring some electric rates down later this year. But these potential reductions in energy cost could be offset by higher expenses from new environmental regulations proposed as part of the O'Malley legislative agenda.

For example, the Greenhouse Gas Emissions Reduction Act of 2009 (Senate Bill 278) would require businesses and consumers to take steps to reduce Greenhouse Gas Emmissions by 25% over the next 10 years.

However, a heavy burden would fall on utilities and power companies because the bill contains a provision requested by the labor unions that exempts manufacturers from greenhouse gas reductions.  Unfortunately the bill included no ratepayer safeguards to protect our consumers.  When the bill was heard on the floor, Senator Nancy Jacobs (R - Harford & Cecil) proposed an amendment that would have provided the same protections to Maryland's consumers.

The amendment failed on a near-party line vote of 17-29 with 29 Senators voting against Maryland's hard-pressed consumers.  You can see the Senate vote and the wording of the amendment by clicking here.