O'Malley tries again on electric rates
If you're drawing up a list of Gov. Martin O'Malley's vulnerabilities, electric rates have got to be right at the top. Yes, he did secure credits on BGE bills last year and some other concessions from the company, but did he roll back the 72 percent rate increase he bludgeoned Bob Ehrlich with in the 2002 campaign? Not so much.
So he came back to the issue yesterday with a partial re-regulation plan that would allow the state to regulate future power plants, essentially giving the Public Service Commission the power to decide where and when new plants would be built. It is, O'Malley concedes, not "a quick fix by any means." That's for sure. Best case scenario, it would take years to increase the state's generation capacity enough to tip the supply-demand scales, and even then, we the ratepayers would have to foot the bill for the new plants.
That said, there are clearly problems with the way things are going now. Maryland is a major importer of power, and our ability to get more supply from other states is severely hindered by bottlenecks in the electric grid. And under the current system, the company that's most likely to build new plants in the state (Constellation) is also the one that's making big profits from selling power to us via its subsidiary, BGE. What's their incentive?
(Constellation, incidentally, is open to O'Malley's idea, which is, in some people's minds, prima facie evidence that it's bad. A big factor here is that Constellation's proposed third reactor at the Calvert Cliffs nuclear plant would be exempt.)
The problem O'Malley has is that it's not so easy to roll back electric rates in the short term, and it's in the short term that he's being judged. The governor pointed out yesterday that his budget includes a record $90 million in energy assistance for low-income Marylanders, but they're not the ones he has to worry about in the 2010 election. It's the thousands of people who get sticker shock when they open their BGE bills but don't qualify for (or wouldn't even think of applying for) the aid.
How potent is this issue? On a day when the wind chill is 5 below, The Sun's editorial page printed an unscientific poll asking whether people believe BGE's explanation that their high utility bills this winter are mainly due to cold weather. Nine percent of people believe that, and 89 percent don't. That doesn't strike me as indicating a populace interested in considering a nuanced, long-term plan to rejigger the electric markets.