Smart Energy Solutions News

Good morning and thank you for coming. My name is Johanna Neumann, and I am the policy advocate with the Maryland Public Interest Research Group. Maryland PIRG is a state-based, not-for-profit, non-partisan, public interest advocacy organization that works to promote reliable, affordable and safe energy solutions for Maryland.

The message today is clear: We are here today to call on Maryland’s leaders to act swiftly to implement real solutions to fix Maryland’s broken electric system.

Today, on the eve of a 50 percent utility rate increase, it is all too clear that deregulation of the electricity market has failed. Eight years ago, energy companies promised us more competition and lower rates, but the exact opposite has happened. Tomorrow over a million Maryland ratepayers will see their rates skyrocket and there is still no real competition on the horizon.

It is high time that we restore public accountability in the electric utility system and force the utility companies to make smarter decisions about energy resources. Some solutions are long-term and others are available now.

In the immediate time-frame, we call on Chairman Larsen and the Public Service Commission to take action now and move forward known solutions to rising rates.

With energy costs rising, we can keep bills steady by using less energy. The PSC should act swiftly to set targets for utility investment in energy efficiency. At a minimum, utilities should be required to reduce energy use by 1 percent of current levels for each of the next ten years through conservation and energy efficiency programs. Every dollar invested in energy efficiency pays back more than 300 percent in savings1.

This investment in energy efficiency will lower individual bills and have the potential to lower overall rates by reducing strain on the system and making us less reliant on the spot-market used to meet peak demand. Special attention needs to be paid to renters and landlords, since renters pay the utility bills, but landlords generally perform maintenance and purchase appliances.

Secondly, the PSC should open a case dedicated specifically to energy efficiency. Some measures related to energy-efficiency, such as de-coupling utility profits from how much power they sell, are currently being considered on a case-by-case basis. Given the cost-effectiveness and speed by which energy efficiency can reduce energy use, it makes sense for the PSC to investigate energy efficiency in a consolidated way.

Lastly, legislators need to increase funding to the Universal Service Program, which helps low income Marylanders avoid shut-offs.

While implementing immediate fixes, we need to aggressively pursue long-term solutions. In the coming months, Chairman Larsen and the members of the Public Service Commission will embark on an extensive study, mandated by the General Assembly, of the options available to Maryland to restore public accountability of the utility companies. We hope that as part of that study the PSC will seriously consider the following policies:

• Require utility companies to develop and annually update15-20 year plans for providing electric and natural gas service at the lowest possible cost to consumers. Rhode Island could serve as a model here. A new law there requires utilities to develop purchasing plans to procure power for consumers at the lowest possible cost. To improve stability and reliability, utilities must use a mix of energy resources, including energy efficiency, locally generated power and renewable energy.
• Develop plans by which distribution utilities can acquire generating potential in a cost-effective way. Enabling regulated utilities to generate a portion of their base-load, and sell it at regulated rates may help insulate customers from market manipulation and price spikes.
• Develop a plan for a state-wide or Baltimore City public power authority. A public utility with generating potential that serves the public interest, rather than the interests of shareholders, has the potential to provide power at lower cost than competitive market rates. Over 2,000 municipalities and several states are served by public power utilities and it would be wise for Maryland to consider the option.

Unfortunately the 50 percent rate hike is here for BGE customers. It’s happening because energy companies re-wrote the rules that govern the market. Accountability has been lost, and our electric system is in the hands of companies looking for ways to make enormous profits any way they can.

The bottom line is that Now Gov. O’Malley, the Public Service Commission and the members of the General Assembly need to lead, and make the choices that will give Maryland a reliable and affordable electric system.

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U.S. Department of Energy. http://www.eere.energy.gov/weatherization/ne_benefits.html