Howard County Blog

A Blog on what is going on in Howard County

Thursday, June 22, 2006

Osmundson Has It Right On the BGE Mess

Democrat Dave "OZ" Osmundson, candidate for State Delegate in District 9A, was "right on the money" with his position on the BGE rate increase mess in March and he is still right.


I think everyone in Maryland was shocked to learn that the cost of electricity could go up as much as 72 percent in July. We were even more shocked that BGE would begin adding the additional cost on to consumers now. Meanwhile the Democrats and Republicans are arguing back and forth, blaming each other. One wonders why nothing was done until now when the law to deregulate electricity was passed by Democrats in 1999 (with the vote of every Republican favoring the bill also). The Erhlich administration has been in charge for three years and surely that is time enough for the Maryland Public Service Commission (PSC) Chairman Kenneth D. Schisler to do something. Was the motivation politics, with the idea being that this would help get Ehrlich re-elected in a state that is heavily Democratic?

When this legislation was passed in 1999 the thought was that competition would lower electricity costs. What they failed to understand is the basic economic reality of ELASTICITY of demand. The demand for “necessities” tends to be relatively inelastic and electricity is a necessity. The demand for “luxuries” tends to be elastic. We can’t get along without necessities so trying to create competition between power companies tends to create more collusion than competition.

I believe our state officials should take more of an interest in electrical power and less interest in political power. We don’t need the political finger pointing and posturing when both Democrats and Republicans contributed to this crisis. This huge rise in the cost of electricity may create more romantic candle lit dinners and perhaps a sudden burst in Maryland’s population but it comes at a time when we are already coping with rising gasoline prices and wages are remaining stagnant. Sometimes I get the feeling that our politicians only care about themselves. Politicians are supposed to be our voice and it would do them well to start listening to what regular folks are saying. We don’t need the PSC getting cozy with people who want to make energy a profitable endeavor. Because electricity is inelastic and a necessity it should remain a public utility with regulated fixed profit margins. Deregulation of electricity only results in increased profits for the companies and their stockholders and the big loser is you – the consumer.

David L. Osmundson
24 March 2006

The lack of leadership by Ehrlich is just as shocking as the increases BGE wants to put on everyone's utility bills. Ehrlich should just admit that this whole deregulation nonsense is a mess and move to reregulate BGE.