The Perfect Storm
The events leading up to the 72% increase in customer's rates has been referred to by BGE executives, state commissioners, and state legislators as "the perfect storm". In the years since rates were capped, fuel prices had risen dramatically. Natural gas prices had risen about 125%, regular gasoline prices had risen over 150%, and heating oil prices had risen almost 200%. Maryland region’s fuel prices are tied greatly to natural gas prices. Subsequently, when Hurricane Katrina and Rita caused major natural gas pipelines to shut down for a short period, natural gas prices skyrocketed. Therefore, when BGE went to the market to procure power, prices for power were abnormally high.
Read more about this topic: Maryland Electric Deregulation
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