Take plan, but shop around for electricity

Opting in to Baltimore Gas and Electric's new rate relief plan won't make you any worse off than if policymakers had done nothing this week and jetted off to Sandals resort in Antigua.

And if signing up for your "rate stabilization plan" induces the sweet delusion that the problem of high electric prices is being addressed, so much the better.

Beyond that, there's little to celebrate.

The plan, announced yesterday, merely delays the rate shock. It doesn't guarantee the hundreds of millions in give-backs that BGE parent Constellation Energy was offering two weeks ago (although Constellation still promises the money if it is allowed to merge with FPL Group).

The plan doesn't cause BGE any more pain than an inadequate plan offered by the Public Service Commission in early March.

And it will probably leave thousands of unwitting households fully exposed to the 72 percent average BGE bill increase that everybody just spent six hectic weeks trying to avoid.

Take the plan, by all means. (You have to sign up for it, which is one of the problems.)

But maintain pressure on state leaders to get a big ratepayer rebate from Constellation for the valuable BGE generation plants it took over six years ago. And get policymakers to watch Constellation like a cat in front of a goldfish bowl as the company moves toward merging with Florida's FPL Group.

72% rise July 1

Because of deregulation, high petroleum costs, an expiring rate freeze and a dozen other factors, electric rates for the average BGE household are set to rise 72 percent July 1.

In early March the Public Service Commission announced an ostensible remedy that would have limited the increase to 21 percent but would have billed the other 51 percent later and charged consumers interest in the "bargain."

The new plan would hold the post-July 1 increase to 19 percent rather than 21 percent. It also would lengthen the time before customers start paying market prices for juice as well as the period in which they would have to pay back the deferred bills.

And this time, Ehrlich's office says, there is "no interest for consumers who participate in the program." That was unclear in a reading of the details yesterday, however, and customers apparently would pay interest if the FPL merger doesn't happen.

And there are other problems.

At the PSC's insistence, the March plan was "opt out," meaning BGE customers would specifically have to request being hit with the full, 72 percent broadside if they didn't want the installment plan.

Now it's `opt-in'

This time, unless the Ehrlich appointee-dominated PSC steps in again, the plan is "opt in," meaning you don't get it if you don't ask for it.

Ehrlich and BGE are promising a big education campaign to get people to sign up, but there is a strict deadline, and many households will inevitably be left out.

(BGE claimed in a regulatory filing yesterday that "better research" in recent weeks shows that its customers prefer an opt-in plan, which seriously tests the old laugh test.)

The acid test for the new plan versus the old is that it doesn't cause BGE/Constellation any more heartburn than the widely decried March plan.

Longer deferral

BGE says in the regulatory filing that making people ask for the 21 percent plan rather than giving it to them automatically (unless they say no) will cause fewer people to join, increasing the company's cash flow in the near term and allowing longer deferral and payback periods.

That certainly raises the question of how vigorous the education campaign will be.

Of course there is also the ostensible $600 million give-back by Constellation, which was not in the March plan.

Bogus number

As I noted previously, $600 million is a bogus number. Nearly a third of that is money Constellation says it is owed by BGE customers on top of the 72 percent rate increase for future decommissioning costs for the Calvert Cliffs nuclear plants.

Constellation took over Calvert Cliffs from BGE in 2000 for a sweetheart price as part of the General Assembly's deregulation scheme and is making huge profits on it.

The company wasn't going to get more decommissioning money anyway, and there is no way it should be counted as a contribution to rate relief.

No legal force

What's worse, unlike a deal that almost passed the General Assembly last week, the Constellation rebates do not have the force of law.

In either case, the give-back would depend on the consummation of the FPL merger, but now we have only Constellation's promise.

And worse than that - the give-back is dribbled out over a decade instead of being substantially doled out to ratepayers in the first year or two.

Because of the time value of money (a dollar next year is worth much more than a dollar in 2012), that also diminishes the package's value.

Choices are clearer

Who knows if this is the final deal; the legislature still may come back into session. But your choices have become clearer.

You can do nothing, which means you get blasted by 72 percent on July 1 but will, according to Constellation, save a little money over the long run.

You can opt in, which means you'll delay the misery but not escape it. (And no, you can't accept the delayed increase and then move out of town when it comes time to pay it back. BGE will keep track.)

Or you can opt way out, which may be the best choice of all.

These high prices are already inducing some other electric providers to try to undercut the standard BGE product with better deals, and you can expect to see more of them.