Winter heating worries ratepayer advocates

Nearly 19,000 Baltimore Gas and Electric Co. customers who are trying to pay off last winter's soaring energy bills have defaulted on their special payment plans.

And with a harsh winter forecasted, consumer advocates said they don't know how those struggling families will cope now that a new heating season is upon them.

In April, the state's regulators mandated utilities allow residential customers who owed money to get caught up before the companies swooped in to shut their power off. The commission made specific parameters for those payment plans.

This decision by the regulators came after an influx of customers complained their bills had become excessively high during last winter heating season.

As the Maryland Public Service Commission is gauging the results of the payment-plan policies, many other agencies are saying an exceptionally cold winter and an uptick in people seeking assistance is only going to compound the problem this winter.

But People's Counsel Paula Carmody said the data collected - general aggregates and totals - are difficult to interpret.

For example, in the People's Counsel's most recent commission filing on the case, the office staff indicated the average length of the plans ranges from 4.2 months for Washington Gas Light Co., which serves households in the greater Washington, D.C., metropolitan area, to 10.4 months for BGE.

And even though BGE may have the highest total of defaults of all the utilities because it happens to have more enrollees, Delmarva's 75 percent default rate of plans dwarfs BGE's 29 percent.

The People's Counsel noted that with regard to the default rates, BGE has the longest average plan and the lowest default rate.

BGE has 204,500 electric and 86,800 natural gas customers in Anne Arundel County.

Since the commission's order, the company has enrolled more than 74,000 of its eligible ratepayers throughout central Maryland into payment plans. BGE officials said they do not have a breakdown on how many of those plans include county residents.

Rob Gould, a BGE spokesman, said it's just too early to judge the success or shortcomings of the payment plans.

"A large number of the plans are 12-month plans," he said, explaining that most of the ratepayers who are enrolled began in late April and May. "They haven't even reached threshold."

Gould said in order for any customer to default on a payment plan, he or she had to have missed two payments.

"So missed payments in July or August wouldn't have even entered into default status yet," he said.

Carmody said she had anticipated customers would still struggle to keep up with their bills, even with the abatement of a payment plan.

"We're not surprised that there are defaults on those payment plans," Carmody said. "People are continuing to experience economic difficulties."

More falling behind?

Moreover, consumer advocates, such as the People's Counsel, said they fear the this winter could result in an avalanche of ratepayers falling behind on their energy bills.

Consumer advocates said they want the commission to reinforce its payment-plan directives as well as require more specific data collection to find out what's working and what's not working.

"Our expectations is that some of the factors that led to the high bills will continue this winter," Carmody said.

The regulators don't have much time to prepare for what might come for struggling ratepayers, since Nov. 1 marks the official beginning of the winter heating season.

Lately market watchers have reported the commodity prices for energy - natural gas, electricity, heating oil and propane - will all drop in price compared to the rates consumers endured last winter. For natural gas, it could be 25 percent less than last year; for electricity, it will be closer to a 15 percent reduction.

But even a lower commodity price may not be enough relief for those who are really hurting.

"Those conditions of last year are going to continue really similar to what they were last year," Carmody said.

Chilly forecast

During the initial hearings for the case on sky-high winter energy bills, the utilities' officials testified they believed a colder-than-normal season was the major contributor to the drastic increases. According to weather statistics, January 2009 was 22 percent colder than the January before.

Some weather predictions for this area are pointing toward an even colder season to come. For this winter, Accuweather.com's chief meteorologist and expert long-range forecaster, Joe Bastardi, said the brunt of the winter climate will center on an area covering Maryland to the Carolinas. The source of this prediction stems from a fading el nino, which experts said will create the stormiest and coldest pattern in recent years.

With it, Bastardi predicted this season in Maryland could end up with above-normal snowfall.

State energy-assistance officials recognize the potential crisis that could befall thousands of households as the winter nears. Friday concluded the state's Office of Home Energy Program's observation of Energy Assistance Week, through which staff attempted to educate the public on available programs and cost-saving advice.

Brian Wilbon, deputy secretary of the state Department of Human Resources, said the program is anticipating a significant increase in need, as enrollment numbers have been on the rise for the past three years.

Since July 1 when the department began accepting applications for energy assistance for this year, they've noticed the uptick.

For the period between July through mid-October, Wilbon said the office already has experienced a 14 percent increase over last year.

"We're way ahead of the pace last year, and the weather hasn't gotten bad yet," he said.

Last year, Office of Home Energy Program assisted 145,000 Maryland families at a $169 million price tag. For this year, staff estimate 160,000 households to enroll.

The program staff is expecting that federal grant money will offset the drain a larger caseload would have on the state's funds.

"The early forecast for a colder winter obviously has given us a little more pause," Wilbon said.