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BGE requests another rate hike to cover cost of smart meters

Baltimore Gas and Electric Co. is seeking to raise rates — adding about $15 a month to the typical bill for both services — to recover the cost of installing more than 1 million smart meters.

The utility filed its proposal with regulators Friday. It also requested that customers pay more to account for the city’s recent decision to charge BGE more to use its underground conduit system, which carries power lines.

The Maryland Public Service Commission must approve the rate changes, and the regulatory body typically approves far less than the utility seeks.

Still, the potential rate increases come as some customers are growing weary. This is BGE’s fifth request to raise rates in six years.

“This seems to me to be an onerous increase,” said Roger Staiger, a senior instructor at the Johns Hopkins Carey Business School and former managing director of the retail commodity division at Constellation Energy, BGE’s parent, which is now owned by Exelon

“If you’ve got an average residential customer paying $150 a month, you’ve just slapped on a 10 percent surcharge. That’s going to be difficult for the average customer.”

BGE officials contend that because the cost of electricity and gas has declined in the past few years, along with the price of natural gas, customers’ bills are about the same as they were in 2008, even with the rate hikes.

In addition, power usage has dropped by about 10 percent since 2008, said Mark D. Case, BGE’s vice president of strategy and regulatory affairs.

Case said he doesn’t think customers are fatigued by rate increases.

“If customers’ bills were going up overall, that would be more likely, but the overall bill is going down and customers are using less energy,” he said. “The overall direction of customers’ bills are going down and not up, and smart grid helps with that. Customer satisfaction is at a record high, the reliability has improved.”

The latest proposal would raise the rate of a typical electric customer by 6 percent, or $7.64 a month, and that of the average gas customer by 11 percent, or $7.56 a month.

That’s about the size of all rate increases approved by the PSC in the past six years. Those have increased the average customer’s bill by $7.76 per month for electric service and $7.69 for gas service, or slightly less for customers getting both.

Read full story at The Baltimore Sun