At these prices, why not switch to clean energy?
by Michelle Steel
My head went spinning faster than my single station watt-hour meter when I opened my last BGE bill of summer 2007. It had jumped from $200 to almost $300, a 50 percent hike.
I’ll admit that my air conditioner units and ceiling fans whirr at top speed around the clock, my computer shuts down only when I sleep, I read my refrigerator like an open book and my sons’ reptile tanks are regulated with heat lamps, fluorescent bulbs, water filters and thermometers.
But I do hang my laundry to dry, run my dishwasher only sporadically and keep the blinds closed and my lights off all summer.
That fateful day, I joined thousands of customers who felt the jolt of an enormous rate increase. I was not the only one to plot how to juggle paying the electric bill, insurance premiums and rent.
Short of using my Playmate cooler for a refrigerator and a Coleman lantern for light, my options were limited.
Electric bills are like taxes. You pay them.
But could I find a way to pay less?
Or at least feel better about paying more?
Spinning in a Whirlwind
The disk inside that single station watt-hour meter spins counter-clockwise non-stop, registering kilowatt hours, like an amusement park ride stuck to on. Since June 1, each revolution is more expensive than ever for Maryland’s 1.1 million BGE users, including 230,976 Anne Arundel County and 7,735 Calvert County customers.
Everybody’s paying more for electricity. Rising prices for coal, natural gas and other fuels increase operating costs for all electric companies. We pay for those fuel increases.
BGE’s customers are simply suffering the most precipitous increase 72 percent.
The big jump had nothing to do with my family or yours using more electricity. Or even with rising fuel costs. It has everything to do with long-term electricity markets, according to Public Services Commission economist Phil Vanderheyden.
Long ago, back in 1993, BGE wanted to raise its rates. As a public utility, the electricity producer needed the permission of Maryland’s Public Services Commission. To get the big benefit $300 million the utility had to pay a big price. BGE struck a counter-intuitive deal with the Commission: It would cut its rates by six and a half percent and hold the cut until 2006. Then whatever the market bore, it would charge.
When the year of the big boost arrived, the long-forgotten promise seemed diabolical. The people who’d made the deal were no longer players, while those stuck with the bill howled.
Trying to soften the blow, a new generation governor, lawmakers and regulators produced a comedy of errors that left nobody better off. Indeed, it likely helped then-governor Robert Ehrlich out of office; it certainly cost Ehrlich’s Public Service Commission chairman his job.
First, lawmakers tried to write a way around the increase.
“We wrestled with safety nets for lower income folks and phasing in a rate hike,” said Calvert Del. Sue Kullen. “Among some of my colleagues, there’s still talk of the possibility of re-regulating.”
When the legislature couldn’t agree on a plan, Ehrlich in the midst of his reelection campaign stepped in with a phased plan to spread the 72 percent over 18 months. His opponent, new governor Martin O’Malley, took the plan to court. Ehrlich’s solution was thrown out.
Trying again, Ehrlich called the off-work legislature back to a special session. The plan they crafted so outraged the then-governor that he vetoed it. Lawmakers, in turn, overrode his veto.
In the end, the surviving plan staved off the full increase. For 11 short months, all BGE customers paid only 15 percent more.
Come June 2007, any relief I’d felt melted like a transformer hit by lightning. In July, I was paying 50 percent more plus a monthly interest fee of a couple dollars for the short deferment.
Even your BGE meter reader was not spared. “I’m right there with you,” said mine, who asked to be unnamed. “My bill went from $200 to $300. I expected it to be about $400, so it wasn’t as bad as I thought it was going to be,” he told me as he recorded my monthly kilowatt hours.
By the way, other utilities, like Pepco and Allegany, phased in about the same increase, with one difference: It began in 2004, so the increase came gradually in smaller steps. SMECO customers are also seeing increased bills, according to spokesman Tom Dennison. But their increase is much smaller: about $6 dollars per month for 12,000 kilowatt hours. SMECO also increased the flat Customer Service fee each customer pays for, Dennison explains, “the services that get electricity to you, facilities and employees, things you can touch.”
BGE’s service charge stayed at $7.50 per account per month. SMECO’s, Dennison said, is rising for the first time in 13 years, from $8.60 to $12.90 per month.
Saving Energy, Saving the Environment
Ask BGE how to relieve the pain, and you hear that it’s the customers’ responsibility to manage their own energy costs. Thus, BGE spokeswoman Linda Foy suggests ways to cut energy usage to customers seeking relief from high energy bills.
Baltimore Gas and Electric, BGE, is a subsidiary of Constellation Energy, a Fortune 200 company headquartered in Florida with 2006 revenues of $19.2 billion. Constellation Energy is the nation’s largest wholesale power seller as well as the largest supplier of electricity to large commercial and industrial customers. In Southern Maryland, Constellation Energy delivers electricity and natural gas through BGE, which supplies power to most of Anne Arundel County, plus North Beach and Chesapeake Beach in Calvert County.
Southern Maryland Electric Cooperative, SMECO, sells electricity to the rest of Calvert County. SMECO’s 140,000 Southern Maryland customers live in southern Prince George’s County, Charles County, St. Mary’s County and all but the northern tip of Calvert County. SMECO revenues were $370 million in 2007.
Washington Gas Energy Services is an affiliate of Washington Gas, a natural gas service supplier that has delivered energy to the Washington metropolitan area for over 150 years. Founded in 1996 to sell deregulated energy, Washington Gas Energy Services is the D.C. metro area’s largest supplier of deregulated energy, with annual revenues topping $100 million.
Public Utility Commission Established by the Maryland General Assembly, the commission regulates public utilities, sets their rates and inspects their equipment. The commission also provides some public information and hears public complaints.
The utilities offer plenty of common-sense suggestions on saving energy weatherizing your home, limiting how often you wash clothes and dishes and letting Mother Nature help by naturally drying your laundry and lighting your home.
SMECO’s gone a small step further. On two days this month, customers walking into any of of its four offices can get a compact fluorescent light bulb. Nov. 16, 700 customers got their money-saving bulb; the second date is Nov. 30.
All those good ideas will save you pennies. If, that is, you consistently follow through.
If we indeed change our lifestyles, we can conserve energy, save a bit of money and enlist in the mustering army fighting global warming.
“The recent energy hike is a step toward forcing consumers to re-think their current lifestyles,” says Gary Skulnik, president of Clean Energy Partnership of Silver Spring, a non-profit group founded in 2004 to reduce global warming and air pollution by offering clean energy solutions to people.
The increase brings unrelieved bad news to low- and fixed-income consumers. “It’s a no-win situation for the poor living in the city, who can’t afford to pay their electric bills, much less opt for wind or solar power as feasible options,” said Leo Burroughs, Chairman for the Maryland Coalition to Stop the BGE Rate Hike.
But for the middle and upper class who can afford green alternatives, Skulnik sees an upswing in awareness. These people turn to clean energy as a way to better the environment while, they hope, lowering energy costs.
“Actually, the recent increase is a good thing, in general,” said Skulnik. “It makes consumers more aware of environmental issues.”
Rethinking, as Skulnik suggests, might lead us to follow in the footsteps of the Old Order Amish, who have survived for years without utility-generated electricity, tied together in a close-knit community based on self-reliance and energy independence, free from the electric monopolies.
We tried that lifestyle when Hurricane Isabel hit lighting candles, bathing with baby-wipes, eating chilled foods from coolers and grilling. Over days or weeks, we learned to adapt to being powerless.
Switching to Green Power
Powerless is more than a nice pun. It’s the problem. Powerless is where we are when our only option is to buy electricity from a monopoly. Whatever it demands, we must do with very little relief from the Public Services Commission or the General Assembly.
As consumers, we are not powerless. We don’t have to buy from SMECO or from BGE, whose power is 95 percent-plus generated from nuclear and/or fossil fuels coal, natural gas and oil. Renewable and alternative resources contribute a minimal percent of their power mix.
watt The measuring unit for power
kilowatt 1,000 watts
megawatt 1,000,000 watts or 1,000 kilowatts
kilowatt hour (kWh) The measure of purchased energy.
energy usage The amount of kilowatts for which you’re billed on your electric bill.
clean energy Clean or green energy is produced by means that are renewable and non-polluting.
Renewable Energy Credits or Certificates (RECs) aka Green Tags, aka Tradable Renewable Certificates (TRCs): Property rights to the environmental benefits arising from electricity generated from renewable sources. Their owner can legally claim to have purchased renewable energy.
A green energy provider (such as a wind farm) is credited with one REC for every 1,000 kWh of electricity it produces. The green energy is then fed into the electrical grid.
BGE gets about five percent of its power from the wind, sun or from biomass. Three and a half percent of SMECO’s power portfolio is green, with percentages creeping up to just under 10 in 2022.
We don’t have to wait that long to buy green power. We have the right to choose how our energy is generated. If we can’t pay less, we can at least buy green, raising our rank in the army fighting global warming.
St. Mary’s College in Maryland is doing just that. In October, the state’s liberal arts college started buying 100 percent of its electricity from renewable sources, becoming Maryland’s first state agency to buy all green power.
The college won’t save money; in fact, its electric costs will rise by $45,000, to be paid for by students.
“Our process was driven by students who had an interest in this and voted to raise their own fees to pay for it,” said Chip Jackson, the college’s vice president for planning and facilities.
In return for $25 each, St. Mary’s nearly 2,000 students make a great earth-friendly contribution, reducing their greenhouse gas emissions by 14.2 million pounds a year.
Making the Switch
St. Mary’s College sent out a Request for Proposals after it voted to go green. How do you or I make the switch?
The standard way takes you back to your power company. Your utility is required to inform you how to break its monopoly. That’s one of the conditions of the deregulation plan that swept the nation in the mid-1990s when Maryland jumped on the bandwagon with New Jersey, Delaware and Virginia, and BGE froze its rates for six years.
Here’s how it worked when I called to make the switch.
Step 1 I called BGE’s energy choice specialist at 800-685-0123, the customer service number at the bottom of my BGE bill (also listed online at www.BGE.com) and asked how I could convert to wind power.
Step 2 I learned that customers of any utility can choose to buy five, 50 or 100 percent of their energy from wind power produced in states like Pennsylvania and Texas, where average wind speeds exceed 12 miles per hour and wind can be harvested in wind farms. In Western Maryland, Garrett and Allegany counties are considering building turbines alongside coalmines. Offshore, Ocean City and Delaware are being looked at as sites of nearer wind farms. So far, wind farms have been too controversial for Maryland, ironically, because of potential damage to the environment and to vistas.
BGE doesn’t sell energy generated solely by wind or any other renewable source.
St. Mary's College of Maryland took a giant step toward carbon neutrality with the purchase of credits from renewable energy sources for 100 percent of its annual electricity consumption. The college is the first public institution in the state of Maryland to go all the way for clean energy.
To buy wind-generated energy, I’d need to find and choose my own competitive supplier providing wind power.
In our region, that utility is Washington Gas Energy Services, headquartered in Herndon, Virginia. Washington Gas Energy Services buys windpower generated on wind farms in West Virginia and its surrounding areas and credits it to our local utility companies when we choose green power.
Washington Gas Energy Services, technically a competitive energy supplier, is only one way you or I can buy clean power off the grid. But if I start my search with BGE, it’s the one choice I’ll learn about. So that’s where I started.
Step 3 I searched Washington Gas Energy Services on-line (www.wges.com) and called customer service at 888-884-WGES.
Washington Gas Energy Services wants me, but I had to make the first advance. According to Kimberly August, the company’s director of regulatory and external affairs, Washington Gas Energy Services “seeks to improve competitive retail markets in Maryland.”
However, Maryland laws (but not Delaware’s, for example) block access to customer lists. So Washington Gas Energy Services can’t reach out to make an offer to Maryland gas- or oil-using residential customers who might want to switch.
Once again, you’ve got choice only if you exercise your right.
Step 4. I compared Washington Gas Energy Services’ green products with the energy I get and the price I pay for BGE-supplied energy.
Prices vary with percent of wind use and duration of the contract, with discounts for both volume and length. For example, to buy five percent wind at a two-year price lock costs $11.50 per kilowatt hour. Buying 50 percent over the same two-year period locks prices at $12.90/kWh. One hundred percent at the two-year lock costs $14.40/kWh.
Any of those contracts still cost more per kilowatt hour than BGE’s average price of $10.88. Some counties close the gap a bit. In Montgomery County, for example, wind buyers get a one-cent credit per kilowatt hour up to 20,000 kWhs.
On the other hand, the difference we can make to the world is enormous. For every kilowatt hour of wind energy you buy, you keep about 1,400 pounds of carbon dioxide out of the atmosphere.
I’d like to think some windmill out there was hooked to my electric line, feeding me nice, clean wind power.
It isn’t so. What I or any other green-power buyer actually purchases is not wind but renewable energy credits. “Claim checks in your name on wind power,” is how clean energy broker Skulnik explains the credits.
Thus St. Mary’s College, Jackson said, still gets “the actual electricity, 100 percent of our electrons, provided and billed by SMECO, which isn’t itself a generator but buys on the market. Our renewable energy credits are paying for some other generator somewhere else to put clean energy onto the grid.
“In general, because of its higher price, clean energy doesn’t get into the market without someone buying these credits,” Jackson explained.
Step 5. If I switch, Washington Gas Energy Services informs BGE. BGE adjusts my bills based on the new rate.
I’ll be paying more than ever, but I expect to feel better about it.
But I’ve not decided yet, for I’ve since learned that Washington Gas Energy Services is not my only option.
I can also buy my green energy from an energy broker if I can figure out how to find one. That’s a whole new category of business inspired by energy deregulation and now, as we all reckon with global warming, coming into its own. Energy brokers mean deregulation can finally do us consumers some good if we’re willing to pay more to make a long-term difference in our world’s energy use.
You can’t get a list of renewable energy suppliers from the state, but you can find them on-line, by searching renewable energy brokers.
You’ll find five regional choices on Montgomery County’s website (http://www.montgomerycountymd.gov/deptmpl.asp?url=/content/dep/CERpages/alleghenypower.asp) .
Three are Clean Energy Certification Marketers Wind Current, Sterling Planet and Clean Currents, the clean-energy brokerage Gary Skulnik founded in 2006.
For you and me, their big difference from Washington Gas Energy Services is not their product but their mission.
“We are mission driven, committed to fighting global warming,” says Skulnik of Clean Currents. “We’re the type of company trying to make the world a better place.”
Some 70 regional businesses have bought into Clean Currents’ mission by buying clean energy from them.
Clean Currents is brokering 83 percent of St. Mary’s College’s clean energy, matching the college specification that the broker be local and contract for wind-generated power.
Other buyers are Rockfish Raw Bar & Grill in Eastport and the Fitzgerald Auto Mall in Annapolis.
“We have a passion to design a restaurant to minimize its impact on the surrounding neighborhood,” said Rockfish general manager Matt McLaughlin, speaking for himself and owner Greg Casten.
Rockfish signed up a year ago with Sterling Planet for a three-year contract to purchase 1.14 million kWhs of wind power 100 percent of their usage for their restaurant. Rockfish wasn’t trying to save money, McLaughlin explained. Green power was one part of their program to change their industry’s wasteful habits.
For Fitzgerald Auto Mall, “Buying green just makes a lot of sense from all different perspectives,” said director of operations Rob Smith. “Maybe more research dollars will go into green energy. And maybe other car dealerships will follow suit.”
“We’re pounding the pavement marketing to business,” said Skulnik of his success in selling green energy to businesses. Residential customers like you and me are the customers Clean Currents wants next.
“In December, we’re launching a program with Washington Gas Energy Services for BGE and Pepco electric customers,” Skulnik said. “Our goal is 3,000 residential customers this coming year.”
I didn’t want to wait, so I went right online.
Step 1 I Clicked onto www.cleanenergypartnership.org. Then I followed the prompt to Buy Clean Energy. That put me onto Clean Currents’ site, where I clicked onto the prompt for Residential Renewable Energy.
Step 2 I reviewed the summary for the carbon used in the average home and how I could offset my own carbon use by buying green tags, Clean Currents’ term for renewable energy credits.
Step 3 I decided how many green tags I wanted to purchase for my home depending on how much money I could afford to spend reducing my own home’s carbon footprint. Twenty dollars a month is said to neutralize 10 tons a year of carbon, the equivalent of an average home’s total annual electric use.
Step 4 I could fill out the secure checkout form and pay with my credit card. Or, as a BGE customer, I could wait until early 2008 and switch my home power to clean wind.
Poorer But Wiser
I haven’t found a way to save money on my electricity bill. But I have learned how to read it, and my new literacy gives me freedom of choice and a better outlook for the future.
“If people don’t pay attention to their electric bills,” Skulnik said, “they’re not going to be involved in fighting global warming at their household level.”
Now that I pay attention, I’m enlisting my household in the army to fight global warming.