BALTIMORE (August 12, 2019) – Late Friday, the Public Service Commission (PSC) issued an order and press release, “Advance Alternative Ratemaking Policy—PSC Opens Path for Multi-Year Rate Plans.” AARP Maryland has concerns regarding the PSC’s order and warns that electric and gas rate increases could be on their way for Marylanders, as the order approves a utility-backed alternative regulation scheme.
AARP Maryland is pleased the Commission rejected formula rates—the most onerous of the proposals. However, AARP Maryland is disappointed with the approval of a multi-year rate plan, which will likely result in pre-approved rate increases using speculative forecast costs. Utilities have complained about the administrative burden of filing for rate increases and having to prove their need for more money from consumers. The rate cases are not nearly as expensive as un-reviewed predictions of potential costs.
“AARP Maryland, the Office of Peoples Counsel, the Building Owners and the Office of the Attorney General are among many who posed concerns about moving toward alternate ratemaking and noted that there was little if any indication of a verifiable benefit to consumers” said Hank Greenberg, AARP Maryland State Director. “Predictable rate increases for the next three to five years — particularly if unjustified — are no benefit to Maryland utility consumers.”
“The miniscule amount of money saved in overhead by avoiding rate cases is no match for the savings found in a thorough PSC rate case review where millions of dollars in savings are identified that can offset proposed un-reviewed rate increases,” continued AARP Maryland Associate State Director for Advocacy Tammy Bresnahan. “Both AARP Maryland and the Office of People’s Counsel dismissed this unsubstantiated claim in our testimony and our filed comments.” Indeed, some testimony suggests that the workload for the regulators has increased in other states.
AARP Maryland urges the PSC to use the working group process to ensure that:
- the burden of proving the need for higher rates is clearly with the utility;
- rates are in fact reasonable and the investments are used and useful for the benefit of consumers;
- if consumers are overcharged, there is a quick and user friendly mechanism for reconciliation with the consumer; and
- the Commission re-evaluate the need for monthly surcharges that utilities impose on consumers over and above rates.
With more than 890,000 members across the state of Maryland, AARP is the nation’s largest nonprofit, nonpartisan organization dedicated to empowering Americans 50 and older to choose how they live as they age. With nearly 38 million members and offices in every state, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, AARP works to strengthen communities and advocate for what matters most to families with a focus on health security, financial stability and personal fulfillment. AARP also works for individuals in the marketplace by sparking new solutions and allowing carefully chosen, high-quality products and services to carry the AARP name. As a trusted source for news and information, AARP produces the nation's largest circulation publications, AARP The Magazine and AARP Bulletin. To learn more, visit www.aarp.org or follow @AARP and @AARPadvocates on social media.