Baltimore Gas and Electric to Implement PSC Order to Provide Rate Deferral Option for Customers
May 01 2006 - 6:52PM
PR Newswire (US)
Requests Rehearing to Preserve Legal Right to Address Issues in
Future BALTIMORE, May 1 /PRNewswire-FirstCall/ -- Baltimore Gas and
Electric Company (BGE), a subsidiary of Constellation Energy
(NYSE:CEG), 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. DATASOURCE: Baltimore Gas and
Electric Company CONTACT: Robert L. Gould of Baltimore Gas and
Electric Company, +1-410-234-7433 Web site:
http://www.constellation.com/ http://www.bge.com/ Company News
On-Call: http://www.prnewswire.com/comp/084087.html
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