Just about the time it looks as though electric users will get a break on their rates, something always seems to happen.
This time it was the welcomed news that a rebate negotiated by the General Assembly last year meant a one-time savings of $170 per customer of Baltimore Gas and Electric. Before consumers could count their money, BGE announced a rate hike that will cost its 1.1 million ratepayers an average of $96 more a year.
Without the rebate, the damage would have been worse. Still, the rising electric costs are causing some mean hurt on the pocketbook.
The rebate was a settlement with Constellation Energy, BGE's parent company, and ends the lawsuits between it and the state. It wasn't the only concession the state has won with the giant energy supplier. About $1.5 million has been eliminated in decommissioning costs and $347 million in consumer credits will be preserved. As a result of a complaint filed with the Public Service Commission, ratepayers will save another $225 million in payments between June 2011 and May 2012.
The federal and state governments have been successful in holding the electric supplier accountable for their pricing - but their aggressive action doesn't prevent BGE from hiking its rate every year. For that we have deregulation to blame.
Electric customers enjoyed low rates for years because the industry was regulated by the state. Once those regulations were removed in 2006, BGE raised their rates 72 percent - an average of $743 a household - just to catch up. So much for deregulation.
But the rate increases didn't stop with that catch-up rate. This year BGE announced rates would increase another 7.6 percent in June, a higher amount than anticipated because of rising costs for coal, oil, natural gas and nuclear power.
The increases only add to the woes of middle- and low-income wage earners. Gas prices are closing in on $4 a gallon. Milk, eggs and other grocery items are rising - a global shortage of grains is even pushing up prices of bread and other products too. Taken together, these costs are forcing consumers to make difficult financial sacrifices.
Government can't solve this problem with tax rebates and subsidies, but it can look for ways to make the electric industry more competitive. In the long run, for instance, auctioning the state's electric business may help to manage prices. But there is no short answer - despite the posturing of politicians - to contain these escalating prices. As sure as your lawn will have weeds next year, rates will rise again.
The best recourse for consumers is better conservation. Keeping shades drawn during the day, lowering the thermostat and reducing the use of air-conditioning and lights will make a difference - however small.
We suspect people are driving less because of rising gas prices. It is about time we respond to rising electric rates the same way.
