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  • Md. legislative report

  •   Committee Agrees on Cutting Power Rates

    By Robert E. Pierre
    Washington Post Staff Writer
    Wednesday, March 17, 1999; Page B05

    A key Maryland Senate committee agreed late last night that residents should receive at least a 3 percent cut in electric rates for five years as the state prepares to open its power industry to competition after decades of regulated monopolies.

    The reduction would not apply to Potomac Electric Power Co. customers because the company has negotiated a settlement with state regulators to sell its power plants. Any reduction for Pepco customers would depend on how much the company made from selling those assets.

    The decision by the Senate Finance Committee came a day after Gov. Parris N. Glendening (D) called for a 7.5 percent cut in residential electric rates if the state moves forward with deregulation. Several lawmakers criticized the governor for grandstanding and trying to make them look like the bad guys. Legislators said the 3 percent reduction would ensure that large electricity users such as universities, hospitals and supermarkets, which can negotiate lower rates, aren't the only winners in deregulation.

    "This guarantees something to the residential ratepayers," said Sen. Martin G. Madden (R-Howard), a committee member who said the requirement is not so high as to discourage competition and be burdensome to home-grown utilities.

    Michael Morrill, a Glendening spokesman, said the governor will continue to press for a larger cut. "He still believes there is a case to be made for 7.5 percent, and he intends to make it," Morrill said.

    Glendening's proposal is similar to one recently approved by Delaware lawmakers as part of a move to deregulate the electric industry there. Maryland House Speaker Casper R. Taylor Jr. (D-Allegany) this week offered his own plan to cut rates by 2 percent to 7 percent.

    Initial versions of House and Senate deregulation bills called for residential rates to be capped at current levels for four years, and for setting up special funds to cover the cost of environmental protections and to ensure that low-income customers get power. After weeks of negotiations with interested parties, both House and Senate committees are expected to approve measures in the next week and send them on for final approval. Both committees are considering dozens of amendments.

    © Copyright 1999 The Washington Post Company

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