JOINT PRESS BRIEF
ELECTRICITY PROPOSAL TO BRING MARYLAND
HIGHER BILLS, DIRTIER AIR
For further information, contact:
Gigi Kellett at 410-467-0439
(eve: 410-322-5035)
Bill Prindle at 202-429-8873
ex 710 (eve: 202-492-9698)
Ed Osann 301-535-4013
FOR IMMEDIATE RELEASE
January 15, 2003
BALTIMORE, MD -- New plans for electricity service in Maryland
will bring higher bills, less stable rates, and more pollution,
according to a group of eleven environmental organizations and advocates
of clean energy. In a letter released today to the Maryland Public Service Commission, the
groups urged the commission not to approve a "settlement agreement"
recently signed by the state's major electric companies, large power
users, the commission staff, and other state officials. If approved,
the agreement would govern the terms of service for over 95% of
Maryland's electricity rate-payers -- those who have not chosen
to switch electricity suppliers and continue to be supplied from
their traditional electric companies under "Standard Offer
Service."
In their letter, the groups recommend that the commission not accept
the settlement in its present form, but rather act to ensure that
Standard Offer Service includes specified amounts of electricity
from clean renewable sources under long-term agreements and that
previous stipulations to restore energy efficiency programs for
electric customers be carried out and expanded.
"This settlement agreement ignores the role energy efficiency
and renewable energy can and should play in ensuring reliable and
affordable electric service for Maryland consumers," said Gigi
Kellett, public interest advocate at the Maryland Public Interest
Research Group. "Our air quality problems remain severe, and
power plants are major contributors. Yet this agreement offers no
assurances that either energy efficiency or clean renewable energy
will be more accessible in Maryland -- measures which can help reduce
pollution and save consumers money."
The Settlement Agreement contains binding ground rules for the
provision of "Standard Offer Service" to homeowners and
other retail customers in Maryland during the four-year period that
follows the expiration of the rate-freeze period of each of Maryland's
four investor-owned electric distribution companies (beginning July
1, 2004 for Pepco and Connectiv customers). In brief, the Settlement
Agreement requires that -
In addition to the price fluctuations that will result from short-term
contracting, retail customer rates are to be increased by a so-called
Administrative Charge of 4 mills for residential customers and 5.5
mills for small commercial customers, of which not less than 1.5
mills and 2 mills, respectively will be retained by the electric
companies explicitly for the benefit of their stockholders. The
agreement is silent on energy efficiency programs for electric customers
-- programs that were largely dismantled by the electric companies
with the approval of the Public Service Commission.
"Many of the rosy predictions made four years ago about deregulated
electricity markets came crashing down with Enron," said Bill
Prindle, Deputy Director of the American Council for an Energy-Efficient
Economy. "This agreement -- with its reliance on short-term
contracting -- will bring Maryland consumers face-to-face with the
same price volatility that has shaken the electric power industry
all the way to Wall Street. Energy efficiency is a cheap insurance
policy against these risks, but the settlement is silent on efficiency
and dumps these risks on the consumer. It's incomprehensible that
our Public Service Commission -- charged with looking out for the
public interest -- would agree to it."
"Recent polls have shown that residents throughout Maryland
are concerned about air pollution and global warming, and support
renewable energy and energy efficiency," said Mike Tidwell,
Director of the Chesapeake Climate Action Network. "If the
Public Service Commission cannot apply the law more effectively
to restore energy conservation programs and reduce our reliance
on dirty fossil fuels, then we need either new laws, new commissioners,
or both."
"Energy efficiency and renewable energy should be part of
the portfolio of electricity resources going forward," Kellett
concluded. "Both can serve as hedges against the price swings
and demand spikes that are inevitable in the wholesale power market.
Their environmental attributes come as a bonus for anyone who takes
a breath in Maryland."
The following organizations signed the letter to PSC Chair Catherine
I. Riley: Alliance to Save Energy, American Council for an Energy-Efficient
Economy, Anacostia Watershed Society, Chesapeake Bay Foundation,
Chesapeake Climate Action Network, Clean Water Action, The Cleanup
Coalition, Maryland Conservation Council, Maryland Public Interest
Research Group, Natural Resources Defense Council, and Northeast
Energy Efficiency Partnerships, Inc.
The full text of the letter is available in pdf format at http://aceee.org/tstimony/marylandsos.pdf.
