COMMENTARY:

Electricity Deregulation: Two Years to A Possible Economic Train Wreck for Marylanders

by J. Russell Tyldesley

What will happen to the individual homeowner by 2006, when the caps come off and the Public Utility Commission fades into obscurity?
Why does the deregulation of electricity feel like an impending train wreck? Does anyone remember how we got talked into this? Were we given a choice? I vaguely remember our legislators approving this scheme several years ago, but I was busy with other things ( like a rigged election ) and wasn't paying enough attention. And besides, it wouldn't hit us until 2006, and that seemed so far in the future. This was, of course, way before Enron. The meaning of Enron still remains not fully explicated, and with Arnold now running things in California, we may never have our day in court. Is anyone checking with our closest allies in Great Britain on why they reversed their deregulation? Is it too late to learn from experience?

All these suppressed uneasy feelings rushed back to the surface when I read in the Baltimore Sun (4/2) that the State of Maryland had reverse-auctioned its electricity requirements and claims to have "trimmed its electric bill by more than an estimated $3 million over the next two years."

I'm not sure what "more than an estimated" means, but reading a little further, it turns out that $3 million is the estimated reduction of the increase the Maryland will pay. Other large electricity users are also taking bids and locking in rates for the future, even though these rates are more than they are paying now. So, if--with immense bargaining leverage--even the big users are facing rate increases, what will happen to the individual homeowner by 2006, when the caps come off and the Public Utility Commission fades into obscurity?

We can fight big energy only by becoming small energy producers ourselves. Then we won't even care what went on behind those closed door meetings with Dick Cheney.

Will homes be lost to utility liens? There will be little comfort in knowing your house is heated by oil or natural gas. I can probably live in the dark (some would say I already do), but I'm not going without heat or air conditioning. (Hey, look what happened in France last year during their heat wave.)

My prediction is that there will be increased migration to the more temperate zones where heating and air conditioning demand will be less. This will be exacerbated by the baby boomers seeking retirement meccas. This is already evident on the Eastern Shore near the beaches, where a population boom is starting. I'd invest in golf company stocks if I was back to trusting the market. (I'm waiting until they nail Enron, World Com and Tyco executives, among others. I may have a long wait ). But most of the migration to escape utility costs may go further south, so, like alien species, we may have to learn how to adapt to southern hospitality.

Not only will the State of Maryland pay higher rates under the new two-year contract, but most of the money will be going out of the state to Con Edison Solutions in New York and Reliant Solutions of Houston. Did we lose the energy wars? I know the Middle East sucks a lot of our hard-earned surplus wheat by way of the oil cartel, but how much of our treasure do we intend to send to domestic foreign powers?

Well, maybe the people will be able to find an alternative to connecting to the grid by 2006. I do know that if you can produce your own power, the grid must buy it from you--the meters do run both ways. I'll bet they never thought we could get them to run in reverse--that has to be why they let that regulation get through. I'm thinking about hooking up my treadmill to a generator set. I'll report back if it works. The challenge may be to get my cat to work it all night--she is a night person.

There are other possibilities, too. Windmills can be fitted to individual houses if zoning and homeowner association rules permit them, and fuel cell cars may be able to generate and store their own electricity, which could be plugged into the house at night for reverse flow. And, if you want to be really wild, have your own solar array that produces hydrogen fuel.

We'd better get thinking (an advantage we claim over the rest of the world) because, if you haven't noticed yet, all our public assets are being privatized. Nothing is sacred anymore--even our wars are in the hands of profit-making enterprises. We can fight big energy only by becoming small energy producers ourselves. Then we won't even care what went on behind those closed door meetings with Dick Cheney.


J. Russell Tyldesley, an insurance executive, resides in Catonsville, Md.


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This story was published on April 3, 2004.