Maryland consumers are being ignored and taken to the cleaners because its energy utilities have been handed to national corporations and rate payers are used to subsidize the costs of doing business. Our Public Service Commission once regulated in public interest and is now stacked with corporate interest officials with OMalley and Erhlich. Just as with health care we are losing control of the most critical public services as energy is a must and needs to be affordable. As most people are now needing subsidy for heating, cooling, and cooking, these essential needs make people captured to simply getting basic necessities. This does not allow for freedom or democracy when most people must beg for subsidized necessities. SMART METERS are not about sustainability ----they are about rationing energy as prices soar and public subsidies end. ************************* The Public Service Commission of Maryland was created in 1910 to regulate utilities. Also during this time, natural gas was becoming a popular substitute for manufactured gas. Warfield wanted to bring natural gas to Baltimore but did not succeed in doing so. Between 1906 and 1910, gross income increased by 31 percent, and in 1910 Warfield resigned and was succeeded by J.E. Aldred as chairman. Aldred embarked upon vigorous expansion. Much of the companys electricity was supplied by hydroelectric plants on the Susquehanna River, and Consolidated owned several gas generating plants. With production in place, the company could offer more competitive rates. ********************************************** When BGE was sold to Constellation there was a billion dollars from the sale placed in public trust for the closing of Calvert Cliffs. Financial analysts now show that the closing will be done for far less so there is a bolus of public money that can come back to consumers or pay for infrastructure. What we see is an insulting $170 dollars and soaring rates to pay a second time for infrastructure. Just as happened with the subprime mortgage fraud settlement that never made it to the victims of fraud and went to subsidize corporate developers. Time and time again public wealth is lost through fraud and corruption or handed outright as subsidy to now billion dollar a year corporations fat with profit from the publics money. STOP VOTING FOR GLOBAL CORPORATE POLS RUNNING AS DEMOCRATS! Below you see Exelon is soaking its consumers across the country as it is here in Maryland. We have a billion dollars in public trust and receive a $170 rebate completely lost with huge rate increases. OMalley ran for governor on keeping these rate increases away! BGEs customers to get $170 rebate -- ...topix/forum/com/ceg BGE customers will get one-time rebates of $170 and other benefits totaling $2 billion in ... Constellation and BGE to ... Constellation Energy ... ComEd customers face big price increases May 07, 2014|By Julie Wernau | Tribune staff reporter Just as the Chicago area is getting ready for air conditioning weather, residents can expect to be jolted by higher electric bills. Starting June 1, Commonwealth Edison customers on average will see monthly bills jump 21 percent, to about $82 a month from about $69 a month. City residents and others who have switched to competing suppliers wont escape the higher prices because the cost of all electric power is higher. Demand had continued to grow, and in 1981 the Safe Harbor Hydroelectric Project started a four-year expansion project. In an effort to improve profitability, BGE trimmed its operating budget in 1982 and 1983 and sought diversification into other businesses. In 1983 however, the Maryland Public Service Commission turned down BGEs application to form a holding company, stating that Maryland law forbids such a structure for utilities. The holding company reorganization would have enabled BGE to diversify freely. The Brandon Shores Unit Number 1--a coal-burning electricity-generating plant--opened in 1984, helping to eliminate the companys dependence on foreign oil. A second Brandon Shores unit started up in 1991. In 1983 about 60 percent of the companys operating revenue was in electric power sales, and around the same time gas sales began to slump. In 1986 BGE formed Constellation Holdings, Inc., a subsidiary through which it planned to expand its nonutility interests, despite being denied the right to form a holding company. ************************************************* Deregulation in the 1990s In 1992 the company faced a dramatic shift in the way it did business when Congress passed the Federal Energy Policy Act. The act permitted competition in the wholesale power market and, by allowing retail competition, signaled the end of regulated, regional monopolies. Although its relatively small size and regional coverage would work against it in a competitive market, analysts felt BGEs customer mix could be a benefit. Because it had few industrial customers, BGE would not be so much at the mercy of large manufacturers who would set one supplier against another in a bidding war. However, BGE apparently felt the disadvantage of its size and responded to the acts passage by looking for a partner that would help cut costs through economies of scale. In the mid-1990s, the electricity market was growing at a rate of only two percent a year. BGE focused on expanding its gas customer base and managed to increase that divisions profits 25 percent in 1995. However, the companys real estate investments were performing poorly, which pulled down overall company earnings that year. BGE forged an agreement to merge with Washington, D.C.-based Potomac Electric Power Co. (PEPCO) in 1995. The two companies anticipated making substantial staff cuts to reduce overlapping jobs; those cuts and savings from eliminating related redundancies were expected to save $1.3 billion over 10 years. Stockholders approved the deal in 1996, and the Federal Energy Regulatory Commission gave its okay in 1997. Maryland followed suit with conditional approval, but the process was held up by conditions placed on the merger by the District of Columbia. BGE and PEPCO had proposed splitting the expected savings from the merger evenly between customers and shareholders. D.C. regulators, however, wanted customers to get a larger share, and made that a condition of the merger. BGE and PEPCO would not agree to that condition, and the two companies called off the merger in December 1997. The companies had invested more than two years and $100 million in arranging the merger. Analysts considered both companies as likely candidates for other merger or takeover deals in the coming years. In 1998 BGE began a major organizational restructuring that split the company into three discrete units: utility operations, power generation, and unregulated subsidiaries. All the rules under which we operate are being rewritten, Christian H. Poindexter, BGEs chairman and CEO, said to Baltimore Sun correspondent Kevin McQuaid. Thats whats driving this. Part of the reorganization entailed the creation of Constellation Enterprises Inc., a holding company for the utilitys unregulated subsidiaries. The company expected to continue to make management and organizational changes in 1998 as part of its preparation for competition, which Maryland had slated to begin in 2002. Principal Subsidiaries: Constellation Enterprises Inc.; BGE Energy Projects & Services, Inc.; BGE Home Products and Services, Inc.; BGE Commercial Building Systems; Constellation Energy Source. ___________ This is a good look at the progression from public to privatized utility from the 1990s/early 2000s anticipating the problems we have today. Remember, all this is the time of Reagan/Clinton and neo-liberalism....deregulating and consolidating for powerful corporate control of government. You see, all that happened was BGE staffing was slashed, pay declined, service and quality disappeared, and now we cannot even reach a real customer service representative as we wait on hold. Long power-outages come from no investment in infrastructure and maintenance so profit could soar. Now, with the Maryland Public Service Commission stocked with pro-corporate officials from Erhlich and OMalley----this commission looks at the public with contempt at public forums. The citizens of Maryland are ready to return our vital public services to the hands of the public to operate in the public interest with money invested building public value and not profit. Below you see the same questions being asked at the end of the 1990s as are now asked today, only it is getting worse. Sadly, Progressive Maryland is now taken corporate as currently it advocates for the most Wall Street of pols in elections. Anthony Brown will of course act just as OMalley as corporate pol extraordinaire and this is whom Progressive Maryland today endorses. So, it is not only our public commissions taken corporate but our democratic political action groups. Do you hear your pol or political organization fighting these fights? See why only Gansler, Brown, and Mizeur hit Maryland election news? STOP ELECTING CORPORATE NEO-LIBERALS WORKING FOR WEALTH AND PROFIT. RUN AND VOTE FOR LABOR AND JUSTICE! Energy Companies Progressive Maryland 2000s Energy companies – led by Pepco and Baltimore Gas & Electric (BGE, owned by Constellation) – have for decades invested heavily in lobbying in Annapolis and campaign contributions to lawmakers. In just the past year, energy companies spent at least $477,679 on lobbying during the 2004 session (see attached list for Pepco, Mirant, and Constellation) plus untold thousands of dollars on campaign contributions (Common Cause estimates conservatively that they have donated $440,000 since 1999). Those investments have yielded handsome dividends. Sometimes the dividends come in the form of anti-consumer, anti-environmental bills that pass, such as California-style electricity deregulation that became law in Maryland in 1999 and only now is being fully implemented, so far with negative results for environment and consumers. And sometimes the dividends come in the form of what does not happen. The dog that failed to bark helped Sherlock Holmes solve the mystery of The Hounds of the Baskerville. A big and curiously silent hound is the Maryland state government when it comes to the abysmal performance of Pepco and BGE in the aftermath of last year’s Tropical Storm Isabel, when hundreds of thousands of customers went for days (and in some cases weeks) without electricity. That fiasco and the negligence of BGE and especially Pepco have been amply documented. The two committees with jurisdiction over the electricity industry – the Senate Finance Committee and House Economic Matters Committee – held a joint hearing in October 2003, one month after the blackout. At those hearings, lawmakers decided to limit themselves to fact-finding so as not to pre-empt the Maryland Public Service Commission (PSC) from fixing the problem through regulation. But rather than fix the problem, PSC put the fix in. First, in April of 2004, PSC’s Ehrlich-appointed Chairman, Kenneth D. Schisler, fired the engineers and senior civil servants with the technical expertise to evaluate (and potentially criticize in detail) the utilities’ dysfunctionality. Then, in June, the PSC issued an “Order” that actually compliments the utilities for their improved performance since the 1999 blackouts following Tropical Storm Floyd (!) and merely suggests a few costless proposals. These bromides include “enhancing communications between utilities, local emergency management agencies, media and customers” and “consider[ing] taking additional steps with municipal governments to increase private landowner awareness of the risks attendant with off-rights of way tree and vegetation problems that pose risks to utility electrical facilities.” Lending new meaning to the term “captive agency”, the PSC then concludes its Order (“Suggestion” is more like it) with this amazingly counter-empirical claim: “No new 4 evidence or industry information has been adduced or presented that would suggest a need to alter the existing policies regarding overhead and underground wiring of the general electric distribution system.” Will the hound of Maryland state government continue its peculiar silence vis-à-vis electric companies during the 2005 session of the General Assembly? Lawmakers were probably correct this past year to give PSC a chance to do its job. But considering PSC’s failure to do so, and considering Pepco’s subsequent 16 percent rate hike on customers this year, it is high time for the General Assembly to intervene. Lawmakers should hold public hearings and get answers to some obvious questions, such as: • Since deregulation in 1999, has the Pepco and BGE service-areas had more annual black- and brown-out days than before deregulation? • Since deregulation, have the Pepco and BGE service-areas had more annual black- and brown-out days than other parts of the country? • Why was the industry allowed to deregulate in such a way that the utilities could cut investment in infrastructure, such as power lines, poles, transformers, and vegetation-pruning capability? • Why, since deregulation, did the Public Service Commission allow Pepco’s CEO, John M. Derrick, Jr., to double his annual compensation up to $1.9 million per year in 2002? Worse, why did PSC allow BGE’s top executive, Mayo A. Shattuck III, to more than triple the CEO’s salary since deregulation, paying himself a whopping $6.9 million in 2003? Given BGE’s lousy performance during Isabel, how in the world could Shattuck justify a salary like that?• Are PSC members allowed to work for the same companies they supposedly “regulate” after they leave public service? If so, does this help explain the failure of the PSC to chastise either Pepco or BGE after Isabel? And does it help explain PSC’s supine willingness to approve any hike in executive compensation, no matter how outrageous? • Why did power outages in the BGE and especially Pepco areas last longer than power outages in some other areas hit by Isabel, such as North Carolina and Pennsylvania? • Considering that Isabel’s overall impact was not much worse than Floyd’s had been in 1999, why did the BGE area suffer 790,450 customer outages over a period of nine days after Isabel compared to only 503,831 over the same time-period following Floyd? Worse, why did the Pepco area suffer 545,000 customer outages over a period of eleven days after Isabel compared to only 79,000 after Floyd? Granted, 2004’s wet summer made 5 trees easier to topple during Isabel, but was the ground so much softer as to explain this huge increase in power outages? Based on the answers to these and other questions, lawmakers can and must pass reform legislation – with a strong presumption that re-regulation is the only way to avert a California-like energy mess in Maryland. Will lawmakers take this kind of decisive action in the weeks and months ahead? Or will all that utility spending on lobbying and campaign contributions induce in lawmakers the kind of lethargy that killed reform following the Tropical Storm Floyd blackouts of 1999? __________________ As you see below the consolidation of all industries with the Reagan/Clinton deregulation and global market push has been a disaster for citizens of all states. This happened because the politicians elected as governor appointed officials to the State Public Service Commission who would vote in favor of the corporation and not the public. We saw in the 1980s where this commission worked for public interest and today OMalley actually wants to place Exelon executives on our PSC. THIS IS WHY IT MATTERS WHO YOU ELECT AS GOVERNOR. ALL CANDIDATES EXCEPT CINDY WALSH WILL CONTINUE TO FILL THE PSC WITH CORPORATE APPOINTMENTS. I WILL START TO TAKE THIS UTILITY BACK TO PUBLIC SERVICE. For those who think this is big government-----WAKE UP-----these are vital public services that are being priced out of most peoples reach. When the number of people needing subsidy for energy grows you have disenfranchised those citizens and those subsidies will end. BGE Wins Competitive Bid For Privatization of the Fort Meade Gas and Electric Utility Distribution Systems. Link to this page Baltimore Gas and Electric (BGE) has been awarded a 50-year contract for privatization of the natural gas and electric distribution systems at the United States Armys Fort George G. Meade facility in Anne Arundel County, MD. The Army selected BGE as the successful bidder in a competitive procurement process, which began in 1999. Under the contract, the Governments aged gas and electric distribution systems will be replaced with new, modernized, BGE owned, operated and maintained systems that will provide safer and more reliable service for Fort Meade, its tenants, and the people who live and work there. BGE plans to begin the three-year construction project, which will add about 350 commercial services to BGEs infrastructure, once design and engineering work have been completed. BGE is proud to have won the contract for privatization of the gas and electric distribution systems at Fort Meade, said Frank O. Heintz, President and CEO of Baltimore Gas and Electric Company. It is indeed an honor to be entrusted with this tremendous responsibility. The extension of BGEs surrounding gas and electric distribution systems onto Fort Meade is a natural and logical extension of our existing relationship, which began in 1917 with the establishment of Fort Meade. Fort Meade is one of our most important customers, and I am confident that BGE will meet all of the needs of this sensitive and crucial operation. Note: BGE is a member of Constellation Energy Group . A Fortune 500 company based in Baltimore, Constellation Energy Group is the nations leading competitive supplier of electricity to large commercial and industrial customers. We market energy nationally and manage the associated risks. We own and operate a diversified fleet of generation plants throughout the United States. We also deliver electricity and natural gas through the Baltimore Gas and Electric Company (BGE), our regulated utility in Central Maryland. In 2002, the combined revenues of our integrated energy company totaled $4.7 billion. CONTACT: Linda Foy (media), BGE, +1-410-234-7433, Linda.J.Foy@bge, or Jack Thayer (investor relations), +1-410-783-3647, Jonathan.Thayer@constellation, for BGE ________________________________________ There is not a SMART METER critique that shows energy costs going down for the consumer. In fact, consumers are being hit with inflated bills and not able to attain recourse because these new too big corporations just ignore these consumers and with public justice dismantled-----Americans across the country are having their money taken with no recourse. This is happening in the energy sector and with this consolidation comes the publics loss of control. WE MUST BRING UTILITIES BACK TO PUBLIC STATUS AND WE MUST BRING BACK REGULATION. These profits are ever climbing because the taxpayers and ratepayers are footing the bills for infrastructure and operations while service and quality declines and environmental issues grow. Natural gas is fracking and having Exelon in our backyard increases pressure for fracking in Maryland. Exelon to buy Constellation in $7.9 billion deal Print By Associated Press business staff on April 28, 2011 at 12:13 PM, updated April 28, 2011 at 12:15 PM Associated Press fileExelon Corp.s nuclear plant in Byron, Ill. NEW YORK -- Exelon Corp. agreed to buy Constellation Energy Group Inc. for $7.9 billion Thursday, the latest in a string of acquisitions in the electric power industry. Exelon CEO John Rowe, the longest-serving utility CEO in the country, has long been a proponent of consolidation. He has failed three times since 2003 to acquire a smaller rival. Now the market conditions appear to be on his side. A combination of lower power prices and rising costs tied to tightening environmental standards has been the catalyst for several recent deals, including Duke Energy Corp.s $13.7 billion buyout of Progress Energy Inc. Constellation shareholders will receive 0.93 shares of Exelon for each Constellation share. Thats worth $38.59 a share, a 12.5 percent premium over Constellations closing price on Wednesday. In Constellation, Exelon would acquire a company much like itself -- with one important difference. Along with a regulated utility and a wholesale power division, Constellation has among the largest retail power divisions in the country. Analysts say Constellations large retail arm and Exelons large wholesale power division could work well together. Constellations retail arm is a good fit, because it tends to do well when wholesale markets are bad, said David Grumhaus, a utility analyst at the Chicago hedge fund Copia Capital. Wholesale electric providers own generating stations and sell their power to local utilities or retail power providers either through long-term contracts or through regional power pools. Retail electric providers buy blocks of wholesale power and resell it to industrial, commercial and residential customers. Through most of the last decade, when power prices were rising steadily, retail providers struggled to sign up new customers because they couldnt offer rates lower than what customers were already getting from traditional utilities. Lower demand for electricity in the wake of the recession and persistently low natural gas prices have lowered power prices and allowed retail providers to advertise low rates in order to attract customers. Also, new devices such as smart meters that track when power is used throughout the day have allowed retail providers to offer new rate plans based on when customers use power in order to lower overall bills. Its a deal that makes sense, Grumhaus said. _________________________________________ The same benefits are offered again and again as to why merger after merger is good for the State of Maryland and as the article shows below-------none of the benefits happen. The 600 jobs toted with this deal ended being a staff shakeup where local employees were fired and 600 new staff brought from out of the area. This is a loss of jobs, not a gain. The rate payers were immediately slapped with a whopping rate increase to pay the costs of infrastructure upgrades and operational costs, they were given $100 million tax credit for absolutely no reason to build a complex right on the waters edge in Baltimore------racketeering and unsustainable development in one swoop. This deal kept the coal- fired power plants open and the billion dollars of taxpayer trust tied to paying for the closure of Calvert Cliffs is now in the hands of Exelon. These are all political deals as you see the donations to these campaigns and the connection of Exelon to Obama goes directly to OMalleys top position on the Democratic Governors Association. THE CITIZENS OF MARYLAND HAVE A LOSE LOSE ON THIS MERGER. Now we see Exelon as the main lobbyist for exporting natural gas which will make natural gas prices soar and rates as well. We are being tied to the most invasive and corrupt system of energy control----the SMART METER ----that has as its only goal the rationing of energy as costs soar and public subsidy disappears. It is good to note that as this article states the movement to natural gas in producing energy in Maryland will not take coal-fire out of the equation as Exelon simply sold the coal-fired plants to eliminate its footprint----they are still in operation. Natural gas is far more damaging to global warming than electricity-operation of plants and will be used as an excuse to frack in Maryland. Indeed, Exelon spends heavily to lobby for exporting natural gas and for the export facility here in Maryland. Lastly, the mention of Exelon being required to pay for low-income subsidy was found to be a joke as the money sent was found to be fungible taxpayer subsidy to Exelon. Even the jobs did not happen! YOU MUST ENGAGE IN POLITICS TO BE THE CHANGE!! Break up the Exelon bohemoth! Posted on January 12, 2013 by interestingblogger I recently read in The Daily Record an article which brought some ideas to my mind. The article noted that “Baltimore’s design review panel Thursday gave a preliminary thumbs up to a design for a sleek, glass, brick and metal tower to house the city’s new Exelon Corp. headquarters at Harbor Point.” As I mentioned in another post, the Inner Harbor benefited big business, not the workers. What about Exelon? I’ll give you some background. A while ago last year I wrote opposing the Constellation-Exelon merger in my previous blog, Sunshine Politics that “the merger would be a victory for the monied interests because $7.9 billion dollars went into the pocket of Exelon Corp. for their purchase of Constellation Energy Corp…[and] 120 of those megawatts [of new generation Exelon is required to developed within the state, which is 280-300 megawatts] will come from a natural gas-powered plants. I [also noted]…the merger…causes the last Fortune 500 company to leave Baltimore…[which wont] help lower the city’s 20%+ unemployment. [Using the Baltimore Brew I learned that]…the site selected by Exelon…has been the subject of controversy among Baltimore real estate factions…[which could]…adversely affect electric utilities across the Baltimore region and across the state…[I later added rhat] Exelon paid for [numerous] fines for…past negligence…[including a fine] in 2005, the corporation paid $602,000 for exceeding the sulfur dioxide level in Pennsylvania.” I even predicted the merger would be approved, and I bemoaned the fact that there was not strong public opposition, saying that due to this fact, elected officials fell in line with the deal like Maryland’s Governor Martin O’Malley who “appreciated the PSC’s decision, saying that it will add 6,000 new jobs in Maryland,” who had previously opposed the deal. Using OpenSecrets, I found that “Exelon has been the top contributor to 162 Congressmembers in the House and Senate from 2000 to the present, including Bob Ehlrich is 2000, Ben Cardin in 2012 and Steny H. Hoyer in 2012. Even Constellation Energy gave $10,000 to Stephanie Rawlings-Blake, who I’ve previously described as the anti-occupy mayor. The conditions of this merger set by the Public Services Commission (PSC) seemed notable including a hundred dollar rate credit to all BGE customers within 90 days, an investment of over 113 million dollars over three years by Exelon to “provide energy efficiency and low-income energy assistance to BGE customers” and the development of 285-300 “megawatts of new generation within the state,” 120 of which will come from a natural gas power plant, 125 from “renewable resources” and 30 from solar power. Next, the PSC required the amount of staff at BGE and the two power plants to be the same for the next two years (no firing), but didn’t mention firing from Constellation or Exelon which will not be prohibited. Most importantly, Exelon is required to divest itself of BGE “if Exelon files for bankruptcy or allows its credit rating to drop six levels below investment grade,” which doesn’t seem to take into account the bad record of credit agencies like Moody’s and Standard and Poors which are partly responsible for the current financial crisis (the movie Inside Job explains this well). You may wonder why this merger was a bad idea. Consider the occupiers, who criticized it before they were evicted, who said it is a bad “deal for Baltimore (and the surrounding areas) because it does not protect jobs and has no guarantees for rate relief.” They even organized a march against the merger at one point! The Tribune-owned Baltimore Sun revealed some about the merger that should make one opposed to it, which noted that once Exelon and Constellation are combined, the new company will be “the largest non-utlity energy provider in the United States.” In 2005, a similar merger approved by the Federal Energy Regulatory Commission with a company in New Jersey would have created such a behemoth, but after massive public action, it was stopped. Even without public action to stop the merger, a consumer advocacy group in Maryland, the Maryland Office of People’s Counsel, and its counterpart in Pennsylvania were opposed, saying that “the combined company would hold too much power in the…Mid-Atlantic electricity grid, potentially pushing wholesale electricity prices higher.” As I noted when I wrote this originally, the merger itself could possibly eliminate 630 jobs in Constellation Energy and Exelon, most of which would in Baltimore, along with the fact that Exelon has a horrible safety record. What could we as citizens do about this injustice? I did write in the past that the common folk of the state should participate in “militant non-violence opposing this merger and must push for re-regulation of the energy markets by the PSC,” but I feel more is needed. I still support militant non-violence, yet I think that one can look to the Maryland Declaration of Rights for inspiration. Article 6 points out that “all persons invested with the Legislative or Executive powers of Government are the Trustees of the Public, and, as such, accountable for their conduct,” that “the People may…reform the old, or establish a new Government; [and that] the doctrine of non-resistance against arbitrary power and oppression is absurd, slavish and destructive of the good and happiness of mankind.” The bolded section I believe is the most important. The common folk of Maryland should use the ideas of Article 41 of the Maryland Declaration of Rights, and declare that the monopoly of the Exelon-Constellation merged company is “odious, contrary to the spirit of a free government and the principles of commerce, and ought not to be suffered.” The people must tell their government that the energy markets must be re-regulated and that the Exelon-Constellation merger must be broken up by the state, otherwise Marylanders will suffer.
Posted on: Thu, 22 May 2014 12:33:52 +0000
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