Citizen Corps Fights Utility Rate Hikes

Posted on 07/1/2013 by | AARP Blog Author | Comments

Mary Lou Boris, of Clarksville, joined the AARP Maryland utility watchdog  group out of frustration over power outages. The watchdogs monitor rate hike proposals. Photo by Matt Roth

Mary Lou Boris, of Clarksville, joined the AARP Maryland utility watchdog group out of frustration over power outages. The watchdogs monitor rate hike proposals. Photo by Matt Roth

By Christopher J. Gearon • Fed up with high rates and frequent power outages, Clarksville resident Mary Lou Boris, 66, joined AARP Maryland’s utility watchdog corps.

The retired teacher rallied this spring in Annapolis with other AARP volunteers to raise awareness among lawmakers and has testified at Howard County Council hearings on utility issues.

“It’s horrible,” said Boris, whose home has lost power “sometimes up to eight days.”

Unexplained outages

Some of the shorter outages occur when there are no storms, Boris said. “We quit charting the outages because they happen so often.”

Boris, a Baltimore Gas and Electric Co. (BGE) customer, and other Maryland utility customers have often complained about reliability.

Stanley Balis, 63, of Potomac, a regulatory attorney who has represented Montgomery County in rate cases before the Maryland Public Service Commission (PSC), said county residents are painfully aware of Potomac Electric Power Co.’s (Pepco) years of “woefully unreliable” electric service.

Pepco was described as one of the nation’s most unreliable utilities by a consultant to the PSC, which earlier this year ordered BGE, Pepco and four other utilities to improve their reliability.

“We want to see utilities ensure a reliable and predictable supply of electricity and provide stable prices for residential ratepayers. Prices should also be affordable,” said Tammy Bresnahan, AARP Maryland associate state director for advocacy.

So in February, AARP Maryland created a volunteer utility watchdog corps to monitor legislative and rate hike proposals concerning gas and electricity providers. Volunteers are taught how to testify before regulatory and legislative officials and to educate others.

The creation of the watchdog team was prompted in part by a string of rate increases:

  • In February, the PSC granted BGE an $80.6 million rate hike; residential customers’ monthly electricity bills increased an average of $3.33.
  • In the same rate case, the commission also approved a $32.4 million increase for BGE’s gas customers, a $2.70 monthly increase.
  • Last July, the PSC approved an $18.1 million Pepco rate hike, an average monthly increase of $2.02 for consumers.

AARP has organized utility-related rallies at the state Capitol, held town hall meetings and encouraged volunteers to contact elected officials. AARP Maryland is working with groups in Anne Arundel, Howard, Montgomery, Prince George’s and other counties to counter utility rate increases and push for better service.

The effort is gaining steam after the General Assembly adopted a bill that allows natural gas companies to more easily charge consumers for infrastructure upgrade costs.

The law, which took effect June 1, allows natural gas firms to bypass the traditional rate proposal system. They may levy a monthly surcharge of up to $2 per customer for as long as five years before the completion of a system upgrade. Before the law was changed, Maryland utility customers paid after such work was completed.

In testimony in support of the legislation, BGE said the surcharge will allow the company to replace outdated gas mains more quickly and “at lower overall costs to customers,” largely due to lower borrowing costs. More than 2,000 miles of its gas mains are more than 50 years old, the utility said

The testimony said the “traditional utility ratemaking approach does not adequately support the accelerated replacement of gas system infrastructure.”

Pinch older customers?

“The bottom line is they want a funding stream outside the rate system because rate cases provide a closer look at costs and take more time,” Bresnahan said. “A surcharge allows them to get all the money up front.”

Abbe Milstein, founder of Powerupmontco, a Montgomery County group that monitors Pepco, called the surcharge law a “slippery slope” that opens the door for electric utilities to do the same. She said the surcharge will hit people on fixed incomes the hardest, including many of the nearly 736,000 Marylanders who are 65 or older.

To volunteer for the utility corps, email mdaarp@aarp.org. There is no minimum time commitment.

Christopher J. Gearon is a writer living in Derwood, Md.

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