BALTIMORE, May 1 /PRNewswire-FirstCall/ -- Baltimore Gas and Electric Company (BGE), a subsidiary of Constellation Energy , today released the following statement regarding the Maryland Public Service Commission's revised rate stabilization order (No 80764) issued April 28, 2006.
"BGE is moving forward with full implementation of the Maryland Public Service Commission's (PSC) revised rate stabilization plan to ensure its residential electric customers have the time and materials they need to make an informed decision about the plan. But the company has strong reservations about aspects of the PSC order, and today filed for a rehearing to preserve its right to challenge certain commission findings at a future time.
"BGE's decision to request a rehearing is not meant to - nor will it - delay any customer-related aspect of the rate stabilization plan. Customers need an option to help them manage rising energy prices, and the July 1 transition to market rates is just two months away. In the days ahead, BGE will kick off a comprehensive education campaign to provide customers with the facts they need to make the decision that is best for them.
"While the PSC deserves credit for attempting to achieve a balanced resolution to a difficult and complex issue, aspects of its order threaten to weaken BGE financially and could ultimately - and unnecessarily - lead to higher customer costs. By deferring customer interest payments related to rate deferral, the PSC is forcing BGE to borrow far more - perhaps tens of millions of dollars more. The utility's contributions to the rate stabilization plan already were generous. BGE recently offered to cover interest expense for qualified low-income customers. But the order errs by deferring interest payments for all customers, regardless of their ability to pay. Some customers do have the means to pay the modest carrying charges and should, rather than deferring such payments into the future. To force even more debt on BGE's shoulders will put an additional strain on the utility's finances, potentially raising costs for all customers.
"BGE objects to the PSC assertion that the deferral of interest costs will result in a reduction in the company's bad debt associated with the rate stabilization plan. In fact, just the opposite could occur, again leading to higher costs for the utility and, ultimately, customers. The PSC put forth no evidence supporting this claim. BGE today filed a rehearing request to protect its right to challenge this aspect of the order and recover its costs in a future proceeding."
BGE (http://www.bge.com/) delivers electricity and natural gas to approximately 1.2 million electric and approximately 620,000 gas customers throughout Central Maryland. Constellation Energy (http://www.constellation.com/), a FORTUNE 200 company with 2005 revenues of $17.1 billion, is the nation's largest competitive supplier of electricity to large commercial and industrial customers and the nation's largest wholesale power seller. Constellation Energy also manages fuels and energy services on behalf of energy intensive industries and utilities. It owns a diversified fleet of more than 100 generating units located throughout the United States, totaling approximately 12,000 megawatts of generating capacity.
