Laurel Leader Newspaper Editorial - Lawmakers blew it on rate hike relief - Press Releases - Delegate James Hubbard, Maryland District 23A

Thursday, June 29, 2006

You could argue for hours over the significance of the "relief" plan Maryland lawmakers patched together this month to deal with soaring electricity rates.

Some say it is a consumer's dream that will save homeowners big bucks on their bills; others dismiss it as a bogus bit of showmanship that serves mainly to delay the inevitable rate hikes - and therefore the inevitable voter anger - until after this fall's election.

Personally, we favor the latter interpretation, given that the only definite relief the bill provides is that the big rate hikes will be delayed 11 months.

What you could not dispute, however, is that the lawmakers opted for a timid approach on what is known as "aggregation." And that, from the consumer's point of view, is a shame.

Aggregation is a group of consumers banding together to form a large customer to buy electricity from alternative providers. It has been shown to save consumers money, because, as a large group, they can get a better price from energy providers.

Aggregation is allowed among businesses in Maryland, and it has proven popular. The Laurel-based Baltimore/Washington Corridor Chamber of Commerce, for example, offers members an aggregation program that saves businesses from 7 to 25 percent on their energy bills (minus a fee they must pay to join the group), according to chamber President Walter Townshend.

He said hundreds of local businesses, including churches and private schools, have signed up for aggregation. "They love it," he said.

But unlike in some other states, Maryland's counties and municipalities are specifically not allowed to aggregate to buy energy for their residents.
During the recent debate over rate increases, a proposal to allow such aggregation garnered a lot of support (57 votes in the 141-member House of
Delegates) but not quite enough. Instead, the legislators called for a study of aggregation and its effects.

As we said, it's a timid approach - especially given the fact that aggregation, hardly a new phenomenon, has been used elsewhere with excellent results for consumers. In other words, it hardly needs more study.

Ohio, which restructured its regulation of the energy industry years ago, has allowed local governments to aggregate since January 2001. Since then, according to a recent report, about 170 counties and cities have formed aggregates and offered their residents the chance to join.

In the one-year period ending March 31 of this year, more than 2 million private residences signed up to aggregate, according to a report on the Web site of the Public Utilities Commission of Ohio, which monitors the program.

Allowing aggregation in Maryland would not have been the complete answer to the economic uncertainties facing energy consumers in Maryland, but it would have provided part of the answer - and not just a short-term answer.

Leaders in the Senate and House opposed aggregation as a deal-breaker for the legislation they so desperately wanted to pass. The companies that now provide the electricity see the practice as competition, and if lawmakers had opened the door to aggregation in their bill, the companies' tepid opposition to the bill probably would have grown a lot stronger - thus endangering the bill's fate.

Aggregation advocates were disappointed but not discouraged by the General Assembly's actions. Del. James Hubbard, the Bowie Democrat who proposed the aggregation amendment that failed, promised this: "I will be back next year with the same bill."

If you use electricity, wish him luck.