Proxy Governance Inc., which advises instititional shareholders on how to vote at corporate shareholder meetings, tells owners of BGE parent Constellation Energy to vote against members of the board's compensation committee as a protest against excessive executive pay. The board members, Michael Sullivan, Doug Becker, Freeman Hrabowski, Lynn Martin and Robert Lawless, sit on the committee that sets pay for Constellation CEO Mayo Shattuck and other top bosses. CEG's annual meeting is July 18.

The average three-year compensation paid to the CEO is 156% above the median paid to CEOs at peer companies and the average three-year compensation paid to the other named executives is 190% above the median paid to executives at peer companies. We note that our calculations include compensation paid to former CFO E. Smith, who resigned in May 2007.

We have concerns regarding the company's executive compensation, which is high compared to peers and given the company's financial performance relative to peers. The high pay appears to be driven by two factors: first, in 2005, large option grants were made to CEO Shattuck
(valued at $18.4 million), EVP/Subsidiary Chairman T. Brooks ($5.6 million) and EVP/CFO/CAO F. Smith ($4.5 million).

A large portion of these grants represented “replacement” options that were granted in connection with the then-proposed merger with FPL, which was subsequently cancelled. These options replaced options that were exercised by the executives at the request of the Compensation Committee in order to minimize the potential amount of excise taxes and tax gross-up that would become payable by the company following the merger.

We believe that the company should not have offered to replace the exercised options
before the merger was certain. By doing so, the company locked in a profit for executives and gave them another chance to have "another bite of the apple" - to profit twice from the same option grant. We also do not support the use of gross-ups to pay for taxes that would have been
owed by the executives.

Secondly, we note that although the company generally did not grant equity awards to executives in 2006, they did grant unusually large cash incentive payments. In 2006, Shattuck received $10.8 million and the other named executives received between $4.5 million and $7.8 million in annual and long-term cash incentive awards. As we noted last year, the company abandoned its long-term performance metrics for 2006 on the grounds that uncertainty with regard to the FPL merger made any performance goals unworkable. This decision allowed the long-term award to vest 100% within two years, with no performance vesting requirements. We believe it was inappropriate for the committee to simply drop all performance-based vesting criteria from the long term incentive awards.

While we generally believe that the board is properly discharging its oversight role and adequately policing itself, it appears that the compensation paid to the company's executives is out of line relative to that paid to peer executives. Therefore, we recommend that shareholders withhold their vote from the Compensation Committee members who are subject to election at this meeting (D. Becker, F.Hrabowski III, R. Lawless, L. Martin and M. Sullivan) as a way of signaling concern about the company's compensation practices.

Posted by Jay Hancock at 10:29 AM | Permalink | Comments (1)
                    

A coalition of consumer groups and bulk power buyers unveiled the Campaign for Fair Electric Rates today. Their Web site doesn't appear to be working. But here are some excerpts from the press release. Members include the American Public Power Association, the Electricity Consumers Resource Council and the Consumer Federation of America.

The campaign will educate consumers, businesses and the media on the failures of restructured electricity markets; and organize the public to contact their senators and representatives. The campaign is urging Congress to request that the Federal Energy Regulatory Commission (FERC) investigate the wholesale electricity markets and take action to protect consumers.

Participants in the campaign are united in their view that the restructuring of the wholesale electricity markets has not produced promised benefits and instead has harmed consumers and the economy. Fundamental changes made to the wholesale electricity markets have not produced competition; instead they have created exorbitant profits for many companies that generate electricity, excessively high electricity rates for consumers and insufficient investment in new power plants and transmission lines.

Despite these problems, the FERC, the federal agency with the responsibility to protect consumers, continues to ignore repeated calls from consumers and businesses to investigate these markets.

Posted by Jay Hancock at 1:55 PM | Permalink | Comments (1)
                    

For frustrated former Ohms Energy clients owed refunds, the ordeal may soon be over. Ohms was an alternative electricity seller that suspended business last year. For some reason, some BGE customers (BGE delivered the Ohms kilowatts) got double billed near the end of Ohms' service and have been trying to get refunds ever since. The Public Service Commission knows about the problem and has been trying to resolve it. It said yesterday that the Ohms refunds will be sent out tomorrow. Here is the email from spokeswoman LaWanda Edwards:

Ohms and BGE has reconciled all of accounts who have either contacted > BGE or PSC to file a complaint against Ohms Double Billing practice. > Ohms will finally send refunds to BGE or directly to customers on June > 12, 2008. The refunds going to BGE will clear customers account who are > currently carrying balances related to the double billing. The direct > refunds to the customers, which this customer falls in this category, > paid the double billings by Ohms. That's why they will receive a > refund."

Posted by Jay Hancock at 10:24 AM | Permalink | Comments (0)
                    

Since Mike Miller and the Maryland General Assembly deregulated electricity in 1999, BGE and other utilities must buy electricity on the wholesale grid. Once utilities made their own power, marked it up for a modest profit and sold it to consumers. Now electricity depends on a so-called "market" that actually is replete with market failures.

Why is this so? Electricity isn't like products that trade in other markets. You can't bottle it, so there are no inventories. This makes price manipulation easier. At the same time there are huge barriers to entry, so incumbent producers have quasi-monopoly power. This makes price manipulation even easier.

I didn't have room for this in today's column, but let's review some of the problems we know about just from the last year and a half. The cockroach theory certainly applies here -- there are a lot more that you don't know about than the ones you can see.

-- May 2008. The Federal Energy Regulatory Commission reveals that Edision Mission spent three years evading questions and delivering misleading information about suspicious selling practices that look similar to price manipulation schemes employed by Enron and others. The practices took place in PJM, the grid that serves Maryland and a dozen other states. FERC fines Edison $7 million for lack of candor but doesn't say whether the behavior under investigation was proper or improper.

-- April 2008. Maryland's Public Service Commission decides that the wholesale auction that led to a 70 percent price increase for BGE households was proper. But the investigation is largely confidential, and the final report is riddled with blackouts.

-- December 2007. Hedge fund affiliate Power Edge LLC loses an estimated $80 million on aggressive electricity bets on the PJM system that didn't pan out. Under PJM rules, the losses are not absorbed by Power Edge's parent. Tower Research Capital. They must be paid by BGE and other PJM members.

-- September 2007. Texas regulators recommend fining TXU Corp. $171 million for alleged price manipulation of wholesale electricity. The matter is still pending, and TXU has refused to turn over some documents to the Texas Public Utility Commission.

-- April 2007. Joseph Bowring, market watchdog for PJM, publicly accusses his PJM bosses of silencing him when he tried to speak out about market irregularities and outsize profits by generation companies, including those in Maryland. The accusation leads to a turnover in top PJM leadership, a measure of independence for Bowring and a FERC investigation that found some profits made by Maryland generators were neither "just" nor "reasonable." FERC, however, declined to reclaim the excess profits for consumers.

-- March 2007. An investigation commissioned by Illinois Attorney General Lisa Madigan finds "disturbing evidence of price manipulation" in that state's wholesale electricity markets. The finding leads to a billion-dollar settlement with Illinois electricity producers.

-- Early 2007: Consultant Edward Bodmer tells Congress in a sworn statement that deregulation has allowed BGE parent Constellation Energy and four other PJM generators to make "supra-competitive" profits - more than they would in a truly competitive market or a regulated market.

-- From the Tacoma News Tribune: Since 2005, FERC has "conducted 64 investigations that have resulted in 13 settlements involving the payment of $40 million in civil fines" for price manipulation in electricity and natural gas. FERC "also pursued two enforcement actions that resulted in the payment of nearly $460 million in fines." Given the high profits of price manipulation, though, the fines are merely a cost of doing business.

Posted by Jay Hancock at 10:50 AM | Permalink | Comments (3)
                    

More disturbing news about the wholesale electricity markets, which in the wake of deregulation set prices for BGE and other Maryland utilities. One thing that got edited out of the column for space is important: Yes, sky-high prices for coal, natural gas and other fuels play a big part in driving up the cost of electricity. These items fuel the generation plants and are probably the biggest cost factor in producing a kilowatt. But thanks to flaws in the wholesale electricity markets, power sellers are reaping huge profits ON TOP of the high fuel costs. It's a double whammy for consumers. High fuel costs don't explain everything.

The column:

Call me cynical, but it sure seems like Edison Mission Marketing & Trading had something to hide.

After regulators began investigating the Boston-based electricity seller in 2005, Edison Mission misled them with "protracted" evasions, wasted "extensive" amounts of their time and committed "severe" violations of its duty to tell the truth, the Federal Energy Regulatory Commission said two days ago.

Serious stuff, and you might think FERC is finally policing the wild and woolly electricity bazaar. But here's the problem: The agency has said nothing about the troubling Edison Mission behavior it set out to investigate, which independent consultants say looks similar to price-manipulation schemes employed by Enron and others.

La di dah. More problems on the "PJM" wholesale electrical grid, which sets sky-high prices for BGE and other utilities, thanks to deregulation. Another wimpy gesture by FERC. And Exhibit No. 3,458 showing that the electricity "market" that was supposed to deliver competitive prices doesn't fit that description and hasn't fulfilled that promise.

Read the whole thing here.

Posted by Jay Hancock at 7:45 AM | Permalink | Comments (0)
                    

BGE customers, take heart. Someone has even bigger electric bills. As the New York Times reports, about Juneau, Alaska: kilowatt use plunged by a third after prices quintupled. That's what I call demand response to price signals!

Electricity rates rocketed about 400 percent after an avalanche on April 16 destroyed several major transmission towers that delivered more than 80 percent of the city’s power from a hydroelectric dam about 40 miles south.

Until repairs are completed, possibly by late June, the city’s private electric utility will depend almost exclusively on diesel fuel. Hydropower is one of the cheapest and cleanest power sources, while diesel, at around $4 a gallon, is one of the most expensive and dirtiest.

With the first bills based on the increased rate scheduled to be sent out this week, fear is in the air. So is the laundry. Dryers eat up watts, and local stores ran out of clothespins because so many people started hanging their laundry outside. Never mind that it rains 220 days of the year and rarely gets truly warm here amid the fjords and forests of the Inside Passage.

The new rate is about 53 cents per kilowatt-hour, up from about 11 cents — around the national average — before the avalanche. The average residential bill before the avalanche was about $86 a month.

Posted by Jay Hancock at 10:34 PM | Permalink | Comments (4)
                    

Here is another reason electricity re-regulation is coming to Maryland. Sempra Energy was one of the few electricity-generation companies to have planned a plant in Maryland, which badly needs the juice. Sempra's Catoctin Power project would have supplied new megawatts to central Maryland, where BGE and other utilities now import lots of power at expensive rates from out of state.

Not any more. In news first reported by Power Market Today, Sempra is pulling the plug on the plant for now because federal regulators rejected a pricing scheme Sempra says was necessary to make the generator profitable. Here is Sempra CEO Donald Felsinger on a conference call with Wall Street analysts last week.

JOHN KIANI: Can we assume that at least at this point you're not going to build [Catoctin] and PJM since FERC did not pass the cone increase?

DON FELSINGER: I think it's safe to say from our perspective that the economics that currently exist don't warrant us making an entry at this point in time.

And:

PAUL PATTERSON: I apologize if you've already gone over this. The Catoctin Power Plant, with the new cone and heat rate situation at PJM, any additional thoughts on that.

DON FELSINGER: I did answer this earlier. That is, as the new cone was published and as the process at PJM and submitting their new cone to the FERC didn't get approved for procedural reasons, we've decided not to enter the market based upon capacity prices. Now, that does not mean that we're not out shopping with utilities for a contract. But currently the economics in that region don't support us going forward with a new build without a contract or a higher cone.

"CONE" stands for cost of new entry, a pricing protocol on PJM Interconnection, the wholesale grid for the Mid-Atlantic region. Sempra and other generators wanted to crank up the Cone, which would have increased their profits. Everybody else fought the higher Cone. A few weeks ago FERC rejected it, and now Sempra is (at least temporarily) taking away its marbles. Look for Sempra to sign a contract with BGE or somebody else in which utility ratepayers will underwrite at least part of the cost of construction.

Posted by Jay Hancock at 11:04 AM | Permalink | Comments (3)
                    

Until now you could count on BGE's kilowatt-hour rates dipping at the end of the hot-weather season. Peak-use kilowatts are usually the most expensive, and there's no peak like a 100-degree day in August. For this reason generators and utilities such as Baltimore Gas & Electric always charged more for summertime juice. Last year, when September turned to October, the price of BGE electricity dropped by almost 0.9 cent per kilowatt hour -- $9 a month for a typical bill.

Not this year. BGE just posted its rates for the 12 months beginning in June. The summertime generation and transmission price (beginning June 1) will be 11.8 cents. (11.4 cents for generation and 0.4 cents for transmission.) But the non-summer rate beginning Oct. 1 will be almost exactly the same. The reason: BGE bought its summertime juice back when energy costs were lower. It bought the non-summer juice when costs were rising, including a big bundle last month. But at this point BGE's standard non-summer rate is still less than what independent kilowatt vendors are charging.

Posted by Jay Hancock at 6:06 PM | Permalink | Comments (0)
                    

My colleague Paul Adams and I are getting questions based on his story today, BGE bills to jump 8% this summer

Readers want to know the exact rates per kilowatt hour starting June 1. The PSC hasn't disclosed the rates, and neither has BGE. BGE rate czar Wayne Harbaugh says the state requires all utilities to disclose new rates on the same day, which will be Friday.

I wrote last week that the "price to compare" for BGE will go up about 4 percent after June 1 to 11.8 cents per kilowatt hour. This is for SUMMER only -- June -- September -- and it doesn't count BGE's additional delivery charge of about 3.4 cents. The 8 percent increase Adams refers to is an average for the 12 months beginning June compared with prices for the 12 months ending in May. It sounds like they bought some winter power this month at pretty high prices, which will crank up the average for the whole year.

PS: But it still doesn't change my opinion on whether you should buy an alternative dirty-electricity product from WGES, Commerce Energy or others. If you want green energy and are willing to pay for it, go for it. But their offers for standard electricity are still higher than what BGE will be charging in the next year. And even if you think electric prices are going even higher, the alternative vendors don't let you lock in for more than two years. So it's not much of a hedge.

Posted by Jay Hancock at 2:20 PM | Permalink | Comments (2)
                    

Maryland won't really start to address its looming electricity shortage until households get better incentives to use electricity during off-peak hours. In the old days customers on BGE's "time of use" plans got huge discounts if they ran dryers and dishwashers at night or on weekends instead of at 5 p.m. on a Tuesday. Now the savings for the one in a dozen households using the plan are much less, and they just got a little worse. BGE has published prices for June -- September. The differential between peak prices and offpeak prices is a little less than it was last summer.

If you're on the plan (most households aren't), electricity burned from 10 a.m. to 8 p.m. on weekdays will be most expensive -- 15.298 cents per kilowatt hour. (This doesn't include charges for transmission and delivery, which are extra.) That's actually a little less than last year's peak price.

But the offpeak price has risen. This summer electricity used on weekends and from 11 p.m. to 7 a.m. on weekdays will be 8.917 cents per kilowatt hour, up from last year's 8.025 cents. The price for "intermediate" times -- 7 a.m. to 10 a.m. and 8 p.m. to 11 p.m. weekdays -- went up, too. With the offpeak price only a fifth less than the round-the-clock fixed price that most BGE households pay, it may not be worth the trouble.

This will change, and the sooner the better. Part of the problem is that the wholesale electricity market is sliced and diced differently than BGE's time-of-use price schedule. That needs to be fixed. But the biggest gains will come when BGE starts widely installing "smart meters." Smart meters will "know" when the cheapest and most expensive kilowatts are being offered at your doorstep, and you'll be able to buy accordingly.

Posted by Jay Hancock at 6:53 PM | Permalink | Comments (2)
                    

Wednesday's column will probably be about how much higher BGE prices will rise starting in June and what alternatives you have. To that end the Kilowatt Shopping Headquarters has been refreshed, with the latest prices from alternative suppliers. They've all gone up by a penny per kilowatt hour or so. The good news is that standard BGE prices won't be rising as fast as gas prices. They'll bump up about 5 percent. More Wednesday.

Posted by Jay Hancock at 6:25 PM | Permalink | Comments (10)
                    

According to news reports, Aquila Inc. built a $140 million Missouri electric plant without a permit and in violation of zoning laws. Now the powers that be are trying to finesse the matter and call it legal. Maryland, of course, seemingly can't get a power plant built under any circumstance.

"Aquila knowingly built the project without a permit and in violation of county zoning laws." said an editorial in the Kansas City Star this week. "Aquila plunged ahead after receiving approval from the Missouri Public Service Commission. In 2006, though, Circuit Judge Joseph Danduran ruled that the then-operating power plant must be dismantled. He said Aquila was guilty of 'arrogance' and 'disregard for the law.' The PSC tried to sidestep that decision by once again giving Aquila permission to keep the plant open."

The latest development is a fabulously florid email, sent by Barton County, Mo., Associate
Circuit Judge Charles Curless, excoriating a legislator trying to make the plant legit. Some excerpts from the Star's copy:

Ed, Congratulations on reaching an all-time low in your so-called "representation" of the 126th District. I am, of course, referring to your incredibly scandalous preferential treatment of the folks at Aquila, regarding the unlawful power plant in Cass County...

You certainly must be aware that the vast majority of us who, unfortunately, live within your istrict are respectful of the rule of law, and are disdainful of activist legislation, such as that which you have ramrodded through the House Special Committee on Utilities...

What in God’s name are you thinking? You have railed, both in your weekly "report" and in many orations, about how judges must follow the law. Now we find that it is your opinion that your friends at this powerful corporation, Aquila, are above the law, and that when it comes
to your friends, "logic" trumps the law. Who else’s pocket are you in?

You have pulled many boneheaded stunts during your time in the legislature which are contrary to the interests and wishes of the citizens of this district, but this one gets the blue ribbon.

Posted by Jay Hancock at 9:35 AM | Permalink | Comments (1)
                    

Electricity rate caps expire at the end of this year for Ohio. Legislators are flailing around trying to do something, or trying to appear to do something. They were up past midnight this morning talking about incorporating "favorable" rates into law and prohibiting or taxing "excessive earnings." From the Columbus Dispatch:

Republican legislative leaders worked into the wee hours this morning attempting to forge a new regulation plan for electricity that satisfies those who want to see competitive markets develop, while easing concerns of Gov. Ted Strickland and others that major rate increases will result.

The final marathon of negotiations followed a veto threat by Strickland, who said Friday that "the bill does not protect consumers against unwarranted and unjust rate increases."...

House Speaker Jon Husted, R-Kettering, has argued that customers will pay the most favorable rate, whether it's regulated by the state or set through a transition into an open, competitive market.

But Rinebolt told a House committee yesterday that the bill's definition of "favorable" was an "ill-defined standard for pricing."...

The governor on Monday evening proposed adding a new provision to the bill covering "excessive earnings," defined as a rate that "significantly exceeds the returns achieved by businesses in the private sector with comparable risk."

"We want a clear and common-sense rate system that doesn't allow utilities to run away with excessive revenue and earnings," Strickland spokesman Keith Dailey said.

But Republicans balked at the proposal, calling it a tough-to-define standard that does nothing to promote efficiency among utilities and could lead to purposeful higher spending....

"I don't want to push something that's going to raid retirement accounts, fatten CEO salaries and promote waste," he said of the governor's proposal. "We're trying to come up with something that's a fair test that promotes efficiency."

Posted by Jay Hancock at 11:05 AM | Permalink | Comments (1)
                    

My mistake. I said in an earlier post that the $170 BGE rebate will vary according to how much electricity your household uses. Wrong. Every BGE household gets $170 exactly, says spokesman Robert Gould. It'll be credited against your monthly bill later this year. To repeat earlier details: You get the rebate regardless of whether you switched to an alternative electric supplier such as Washington Gas or Commerce Energy. All current BGE households get it. If you moved out of the BGE territory last month, you're out of luck. And this rebate has nothing to do with whether you deferred the 72 percent BGE rate increase from a couple years ago. You get it one way or the other.

Posted by Jay Hancock at 1:41 PM | Permalink | Comments (3)
                    

In today's BGE story, O'Malley and his folks portray the settlement as "a $2 billion win for consumers." But only $187 million is something you can put in your pocket -- a rebate, of $170 or so per household, due this year. The rest is credits and transfers of liabilities for the far distant future. I bet its present value is nowhere near the balance of $1.8 billion. And you have to live in BGE territory practically forever to fully benefit.

Posted by Jay Hancock at 11:36 AM | Permalink | Comments (0)
                    

In today's story on the BGE settlement, Sen. Jim Rosapepe got the reason for approving it pretty much right. It leaves Maryland options for both deregulation and reregulation.

Rosapepe noted that the settlement would not preclude the state from returning to regulation and urged his colleagues to reverse course rather than jeopardize the rebates.

"Today, we have the opportunity to approve a rollback of $2 billion of overcharges of ratepayers in the past," he said. "And tomorrow, the fight to end deregulation continues, because nothing in this legislation will stop it."

Insurgent senators wanted to amend the bill by requiring any new electric generation plants built in the state to be regulated by the Public Service Commission. But that would have limited the state's options and deprived BGE customers of a small amount of rate relief, for no good reason. (It would have squelched a quid pro quo in which Constellation agreed to rate relief.) Under required regulation, no generation company would build in Maryland without billing household ratepayers for construction costs. The provision would have effectively stopped Constellation's plans to build a new Calvert Cliffs nuclear plant and probably other projects, too.

As passed, the bill doesn't foreclose the possibility of new, investor-built generators for Maryland. But neither does it keep the state from exploring reregulation -- having BGE ratepayers build their own plant or contracting to buy power and pay the mortgage on a plant built by a third party.

Posted by Jay Hancock at 11:01 AM | Permalink | Comments (5)
                    

As The Sun reported this morning, Gov. O'Malley and his allies are trying to get rid of a provision that the Maryland Senate tacked onto legislation that is crucial to the settlement with BGE and parent Constellation Energy. The amendment would require new generation plants in Maryland -- including a putative new nuclear unit at Calvert Cliffs -- to be regulated by the Public Service Commission. Great idea! What a gesture of solidarity with electricity customers!

But if it passes, it won't just scuttle O'Malley's BGE settlement. It will either 1) prevent any new power plants from being built in a state that badly needs them, or 2) force the public to pay for the costs of constructing them. The regulatory covenant -- dating to the 1930s -- was that capital costs for building transmission lines and generators were built into rates. The ratepayers covered the mortgage. In return regulators capped profits from generation.

The deregulatory idea is that power companies use their own money to build plants and then compete for customers. Customers escape the capital costs but bear the risks of "the market," such as it is. But Constellation will never use its own money to build Maryland plants if what it can charge for the juice will be controlled by the PSC. Nor will anybody else.

So then we're back to square one on ensuring Maryland's energy future. My guess is that we'll end up having a combination of new plants -- some built entirely with nonregulated money and some built with ratepayers covering a portion of the mortgage.

Posted by Jay Hancock at 10:00 AM | Permalink | Comments (0)
                    

The report finding that Baltimore Gas & Electric and parent Constellation Energy conducted themselves properly in the 2005-2006 BGE auctions has arrived on the PSC's Web site. Before only an executive summary was released. The PSC wanted to know whether the reverse auction that BGE used to buy electricity in 2005 and 2006 and that led to a 72 percent price increase was flawed in any way.

The report is censored. They blacked out stuff that was deemed to be confidential information for Constellation Energy, BGE's parent, and other wholesale electricity sellers. It is long (40 pages) and seems thorough. I have asked smart people to look at it over the weekend. At first glance, however, there is one disturbing item: After initial bids flunked a test to ensure prices weren't too high above wholesale costs, the PSC and its consultant raised the threshold and allowed power companies to bid again.

(Update. I should add that the PSC overseeing the 2005-2006 auctions was the "old" PSC, operating under Gov. Ehrlich and headed by Kenneth Schisler. The Kaye Scholer investigation of the auctions was commissioned by the "new" PSC, headed by Steve Larsen and dominated by people appointed by Gov. O'Malley. That PSC has been in the saddle for a year.)

The high-price protection was called the "Price Anomaly Threshold." According to Kaye Scholer, it was supposed "to protect against systemic problems that produce above-market results in the aggregate in order to prevent residential ratepayers from being charged more than a competitive market price for electricity supply." The PAT was based on various components of wholesale electricity prices. It was supposed to shield against the possibility that, for example, a scarcity of bidders could keep the auction from being competitive and could lead to companies winning BGE business at prices substantially above market.

BGE's auction for 2006, when the 72 percent increase kicked in, "saw a sharp decrease in the number of bidders," Kaye Scholer said. In the first round of bidding for the 2006 supply, every single bid exceeded the price anomaly threshold. So what did the PSC and its consultant do? They raised the threshold. The consultant "determined that it needed to modify the PAT," the report says, "to reflect more current market conditions."

Voila: In the next round of bidding, "all of the average bid prices came in below PAT," the report says. "Nothwithstanding issues with the PAT, both Boston Pacific [PSC's consultant] and the OPC's [Office of People's Counsel] consultant, Jonathan Wallach, certified the bidding process as competitive, although not as robust as in prior years."

Despite this, Kaye Scholer found that there was no reason to believe that the resulting BGE rates weren't "just and reasonable" and that regulators or BGE customers had any recourse.

Last week, I reported on another consultant who found that, based on analysis of one round in the auctions, BGE customers were paying 20 percent more than market.

Posted by Jay Hancock at 4:10 PM | Permalink | Comments (0)