* WARNING: THIS IS AN UNOFFICIAL, INTRODUCTORY COPY OF THE BILL.
THE OFFICIAL COPY CONSIDERED BY THE CITY COUNCIL IS THE FIRST READER COPY.
INTRODUCTORY*
CITY OF BALTIMORE
COUNCIL BILL R
(Resolution)
Introduced by: Councilmember Young
A RESOLUTION ENTITLED
A COUNCIL RESOLUTION concerning
Title
Investigative Hearing - Publicly Owned Municipal Electric Utility
FOR the purpose of requesting the Director of Public Works and the Director of Finance to explore the feasibility of Baltimore City developing a publicly owned municipal electric utility to provide service to the citizens of Baltimore at a reasonable rate, to protect hard-working residents from the exorbitant electric rates that are expected to be inflicted on residential users as a result of deregulation of the utility industry and to report the results of the study to the City Council within 90 days.
Body
Recitals
In 1999, when Maryland State officials approved deregulation of electric utilities, it was expected that the cost of the utility would decrease because the cost of energy would remain stable, and increased market competition for the consumer's energy dollar would result in companies vying to offer the best deal.
What in theory sounded good, in actuality has turned into a nightmare. The anticipated merger of the parent company of BGE, the local supplier of electricity to over 1,000,000 residents and businesses and gas to more than 600,000 customers in the Baltimore region, along with deregulation, raising energy prices, and pollution control requirements, is expected to result in an average 72% rate increase in Baltimoreans' utility bills.
Baltimore consumers can expect to be hit with the full impact of increased rates just in time for the sweltering days of summer. In a city where, according to the National Weather Service, the average July high is 91 degrees and where the elderly, one of the populations particularly vulnerable to heat-related illness, number over 110,000, there is cause for grave concern that people will not be able to afford to run their air conditioners or even their fans.
Last year, the temperatures for June and July were above average, with 15 days in which temperatures reached 90 degrees or higher. These "code red" conditions, where the heat index reached as high as 105, led to 11 heat-related deaths in Maryland, 8 of those in the City. In 2002, the medical examiners office attributed 42 deaths to the heat, 27 of those in Maryland.
The most serious heat-related condition that can result in death is heat stroke, in which the body temperature exceeds 105 degrees. And while it is important that everyone take precautions, those particularly vulnerable are the elderly, those people who are overweight, have heart disease, diabetes, respiratory illnesses, or other chronic health conditions. Also vulnerable to high temperatures are pregnant women, because severe dehydration can induce pre-term contractions and deliveries, and infants, because their body temperatures rise faster than those of adults.
Health officials caution that anyone recognizing the symptoms of someone suffering from the most serious condition, heat stroke, should immediately call 911 and place the victim in a cool bath or bathe them with cool towels while awaiting the arrival of 911. Those suffering from the more common and less serious condition of heat exhaustion should be placed in a cool, shaded place, and be given plenty of liquids.
With electric rates expected to more than double this summer, a cool place or even a cool drink of water will be hard to come by unless Baltimore City, like subdivisions across this country, can find an alternative way to supply the essential utilities at a rate that the consumer can afford.
The federal Energy Information Administration reports that the electric utility industry in the United States is made up of several classes of ownership that include 3,170 investor-owned, publicly owned, cooperative, and Federal electric utilities. Investor-owned electric utilities are privately owned entities that represent 8% of the total number of electric utilities and approximately 75% of electric utility generating capacity, sales, and revenue in the U.S.
Cooperative electric companies are owned by their members and established to provide electricity to the membership, usually in rural areas with low concentrations of consumers because these areas have historically been viewed as not economical for investor-owned utilities. 10 Federal electric utilities make up another class of ownership and are part of several agencies of the U.S. Government. Federal electric utility generation is primarily sold for resale to municipal and cooperative electric utilities and to other nonprofit preference customers.
Publicly owned electric companies are the ownership class holding the most possibility for local governments. As nonprofit local government agencies, they provide service to their communities and nearby consumers at cost, returning excess funds to consumers in the form of community contributions, increased economies and efficiencies in operations and reduced rates. Publicly owned electric utilities include: municipalities; public power districts; State authorities; and irrigation districts.
Most municipal electric utilities simply distribute power, although some of the large ones produce and transmit electricity as well. There are 2,009 publicly owned electric companies in the United States that represent about 63% of the number of electric utilities, supply approximately 10% of generation and generating capacity, and account for about 15% of retail sales and 14% of revenue. They obtain their financing from municipal treasuries and from revenue bonds secured by proceeds from the sale of electricity.
Public power districts and projects are concentrated in Nebraska, Washington, Oregon, Arizona, and California, but for more than 75 years, the Hagerstown Light Department, a publicly owned municipal electric utility, has been dedicated to providing sale and reliable electric power at the most economical cost available to its customers in Maryland.
The Hagerstown Light Department serves more than 17,000 customers within the corporate limits of Hagerstown, and over 350,000,000 kilowatt hours are purchased at wholesale and distributed throughout the service territory. The entity is a self-supported City of Hagerstown Enterprise Fund utility with the total costs of operation derived through its electric rate structures.
With electric rates rising astronomically, threatening to break household budgets or, worse, portending untold misery and death during the sweltering days of summer and the bone-chilling days of winter, the situation has reached a crisis level. This "code red " is beyond half-hearted band-aid interventions and calls for innovative thinking and proactive solutions. "The Baltimore Electric Company" has a nice ring to it.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF BALTIMORE, That the Department of Public Works and the Department of Finance are requested to explore the feasibility of Baltimore City developing a publicly owned municipal electric utility to provide service to the citizens of Baltimore at a reasonable rate, to protect hard-working residents from the exorbitant electric rates that are expected to be inflicted on residential users as a result of deregulation of the utility industry and to report the results of the study to the City Council within 90 days.
AND BE IT FURTHER RESOLVED, That a copy of this Resolution be sent to the Mayor, the Honorable Mayor and City Council of Hagerstown, Maryland, the Director of Public Works, the Director of Finance and the Mayor's Legislative Liaison to the City Council.
dlr06-0748~intro/17Mar06
ccres/kilos/nf
dlr06-0748~intro/17Mar06
- 2 -
ccres/kilos/nf