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Changes to MD Utility Regs Face Opposition from AARP, State AG

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Thursday, March 28, 2019   

ANNAPOLIS, Md. – Maryland's attorney general and Public Service Commission are voicing concerns over a bill that would give the utility companies more power to increase their own rates.

Now, if a utility wants to raise gas or electric rates, it has to plead its case before the Maryland Public Service Commission.

But under House Bill 653 and Senate Bill 572, that changes.

As Attorney General Brian Frosh puts it, a utility would get to propose the rate hikes, and the commission would carry the burden of proof to show why the rates are not fair or reasonable.

"And it would put every single household in Maryland in greater jeopardy,” Frosh states. “The odds are that their rates will go up under this new proposed system – they'll be paying more for gas, they'll be paying more for electricity – and I'm not clear that the rate increases would be justified."

The utilities argue the change would give them the flexibility to invest in more a reliable and resilient energy grid, and the bills maintain public notice requirements for rate hikes.

The House already passed its version. The Senate Finance Committee has a 1 p.m. hearing Thursday.

The bills mandate that the Public Service Commission use other means of determining rates than the current standards, which are based historical data of a utility company's actual costs.

Commission Chairman Jason Stanek says such drastic change requires a balanced review by all stakeholders, which he says hasn't been done.

"Our concern is that the bill has the potential to upend the way the PSC has long developed utility rates,” he states. “We are not opposed to any new or proposed rate designs."

Consumer groups say the legislation has been moving so fast that many aren't aware of its potential impact.

"We just have a lot of concerns, see no reason to move this quickly on it – if nothing else, study it in the summer and then, we can move ahead in a more rational way," says Jim Campbell, state president of AARP Maryland

Several business groups say they support the changes, couching them as a means for the state to better plan for its energy future.

Opponents maintain the changes would put utility companies' interests over the best interest of their ratepayers.


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