BGE ratepayers get $170 discount

Customers should see one-time deduction on Sept. statements

By ELISHA SAUERS Staff Writer

Published 08/15/08

Baltimore Gas and Electric Co. customers will see $170 subtracted from their energy bills next month.

The one-time credit is the result of a settlement agreement reached at the end of the last General Assembly session, during which BGE, its parent company Constellation Energy, Gov. Martin O'Malley, the state of Maryland and the Public Service Commission brokered a deal to resolve years of litigation.

The deal ends a string of lawsuits between the state and Constellation from a 2006 dispute, dismisses $1.5 billion worth of decommissioning costs and ends investigations into the 1999 deregulation agreement that has been followed by staggering increases in energy bills.

The rising rates have taken a toll on the utility company's customers. From the beginning of the year through June 2008, about 15,200 BGE households have had their power turned off by the utility company because of ratepayers' inability to keep up with their bills.

In Anne Arundel County, BGE has 221,500 electric and 88,600 gas customers.

But company officials said they hope next month's credit will relieve some of that financial burden. BGE enclosed an informational insert with ratepayers' July bills explaining the upcoming deduction. The notice states that all customers with "active accounts on August 29, 2008" will receive the credit, and "For more than 50 percent of BGE's residential electric customers, the credit is expected to result in a greater than 10 percent reduction in electricity bills this year."

BGE customers pay about $150 for every 1,000 kilowatt-hours, Ms. Shanefelter said, so the $170 credit will cover about as many energy units. That translates to about 12 straight days of running a typical central air conditioner, which uses about 3.5 kilowatts per hour.

Unlike the economic stimulus rebates that most residents also just received from the federal government, this money won't come in the form of checks payable. The $170 will only appear as a line item in print, deducted from the ratepayer's amount owed to BGE.

"It'll be called out in the summary portion of the bill," said Kelly Shanefelter, a BGE spokesman.

For "budget billing" customers who have their energy costs assessed in advance over several-month periods, BGE will credit the $170 toward the ratepayers' September amount due and every following month's bill until the entire $170 is applied, Ms. Shanefelter said.

Paula Carmody of the Office of the People's Counsel said Constellation presented a source document at a legislative hearing in the spring based on March 2008 estimates that concluded the credit would create a 10 percent reduction in ratepayer's annual BGE bills.

But many of those customers have said they feel the break will barely offset the 7.6 percent rate increase they saw on their bills in June. A Public Service Commission report stated that the June increase would result in about $137 more a year for the average ratepayer.

"A $170 credit against a summer bill or their annual bills certainly is a benefit to residential BGE customers," Ms. Carmody said.

Peggy Lamb is one Annapolis ratepayer who said the $170 is just a drop in the bucket, considering how high her bills are now. Lately, she's been making out her BGE electric bill checks for $400 to $500 per month.

"Yeah, it's helpful for one month, but what about for the rest of the year?" Mrs. Lamb asked. "We need more than just that."

But not everyone's BGE bills are as high as the Lambs'. Ms. Shanefelter said if a ratepayer's September bill is less than $170, the remaining portion of the credit will be carried over to the next month's bill and every other subsequent bill until the entire $170 is credited.

For questions about the one-time credit, call BGE's customer service line, 800-685-0123.

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