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Furor over People's Counsel

Many of those on the front lines of the battle over rising electricity costs say one voice has been noticeably absent from the debate - the state's top consumer advocate, the Office of the People's Counsel.

Lawmakers accuse the office and its chief, Patricia A. Smith, of failing to do enough to help BGE's 1.2 million customers who are slated to get hit with a 72 percent rate increase July 1 when six-year rate caps expire.

"They need to be the advocates for the people, said Sen. Paula C. Hollinger, a Democrat from Baltimore County, who sponsored a bill this year to remove Smith from her job. "This is the biggest utility issue since I've been in this General Assembly, and they have been completely absent."

But Smith insists the independent office is working hard for ratepayers. Many lawmakers are looking for a scapegoat for the electric rate increase, especially those who backed the Assembly's utility deregulation plan in 1999, she said. Smith also accused her critics in the legislature of being beholden to the power companies.

"If you really care about the consumers and you are not in the pocket of the utility industry, you'll stop pointing fingers," she said in a recent interview. "I want to focus on consumer issues, not play this lousy game."

Days before the General Assembly adjourns, a public showdown between the energy industry and lawmakers is reaching its peak. But behind the scenes exists a simmering animosity between the legislature and People's Counsel - two sides that once considered each other allies in fighting for the public.

The tension reached a boiling point last week during a hearing on legislation that would fire the five members of the Public Service Commission and replace them with a board controlled by the legislature. The measure, which passed last week, originally called for the firing of the People's Counsel and put the post within the attorney general's office.

Smith offered a forceful defense of her job performance that included blaming her predecessor, Michael J. Travieso, for problems with the deregulation settlement. She told lawmakers she is fighting for consumers in the proposed merger between Constellation Energy and FPL Group, Inc. of Florida.

But in the process, she alienated many, who were so taken aback by her aggressiveness that one, Sen. Nathaniel Exum, a Prince George's County Democrat, got up and left the room.

"I don't think you should sit there and denigrate another person who was in your position before you," said Exum. "I don't have to listen to this."

"You may have made some of us who didn't want to move you want to move you," said Sen. Thomas M. Middleton, a Democrat from Charles County and chairman of the Senate Finance Committee.

But within minutes of her testimony, the committee voted in support of an amended version of the bill that left out the People's Counsel.

Smith's comments were "like a manic storm," said Hollinger, adding that the hearing was the first time she met the attorney. "She was accusing and insulting.

"I have never seen her the entire time she has been at the office of the People's Counsel," she said. "The people have never seen her."

Smith scoffed at the criticism, saying in an interview that politicians ignored her warnings that the end of rate caps would mean huge increases, so now they are shifting the blame to her.

"Those politicians voted for deregulation, and we have advised them over and over again that the prices are going up," she said. "Somebody needs to get out there and tell the truth. If I need to take the ire or anger because I am protecting my clients, I need to. I understand these are not popular things."

The People's Counsel was established in 1924, making Maryland among the first states nationwide to create a consumer advocate for residential water, gas, telephone and electric ratepayers. Its attorneys bring cases on behalf of consumers before the Public Service Commission.

The offices are ubiquitous across the country, and many have gained a higher profile recently as they fight in some states to persuade legislatures to revert to regulating the electric industry or extend rate caps - in response to a consumer backlash in states shifting to free markets at a time of unregulated electric costs.

But with an average staff of 10 people and a budget of about $1 million, the agencies appear overmatched by giant corporations with huge bankrolls, said Charles A. Acquard, executive director of the National Association of State Utility Consumer Advocates, based in Silver Spring.

Association members "did not support this experiment in competitive markets," said Acquard. "Right now they are working as close as the can with the legislature to clean up the mess the legislatures created."

In Maryland, Gov. Robert L. Ehrlich Jr. and lawmakers have been scrambling to negotiate a deal with Constellation executives to reduce the impact of the rate increase, while keeping their eyes on the November election. To gain bargaining power in their negotiations, the Assembly has passed several contentious pieces of legislation, including a bill granting lawmakers the authority to veto the proposed merger.

Much of the finger-pointing regarding the People's Counsel involves politics. Ehrlich appointed Smith in 2003, to replace Travieso, a Democratic appointee who was abruptly fired that summer.

Travieso's ouster - along with several subordinates - is among the cases being reviewed by a bipartisan panel investigating if the Ehrlich administration purposely fired employees for political reasons.

Some Democrats say that after Smith's arrival, the agency became more aligned with business.

"The governor got rid of all the other lawyers who were the advocates for the consumer; since then it's lost its edge," said House Speaker Michael E. Busch. "The People's Counsel is supposed to make sure the consumers have someone sticking up for them."

Middleton said lawmakers respected Travieso's work and were frustrated by his removal.

"He fought like a junkyard dog for consumers," he said.

Smith holds up her experience as a Legal Aid attorney and other credentials as evidence of her commitment to the public. Her expertise includes positions as special solicitor for the Baltimore solicitor's office and deputy counsel for the Maryland Department of the Environment.

Not all lawmakers are taking aim at the People's Counsel. Del. Dereck E. Davis, a Democrat from Prince George's County, said he worked with Smith two years ago to hold public forums on price increases, something the agency says it does regularly.

"When she was first appointed, I thought she was very bright, very capable and a very strong advocate for the low-income consumers," he said. "If there was any criticism, it was that she was solely focused on low-income residents."

Smith acknowledges that the agency's focus is not public appearances, but rather advocating on critical electricity proposals and litigating consumer cases.

In January, the agency filed a complaint before the Public Service Commission requesting an investigation into the proposed Constellation merger with FPL, three months before the General Assembly pushed legislation on the issue.

In March, it filed a complaint urging BGE to halt its budget billing program, in which some 50,000 customers have already been charged part of the 72 percent rate increase.

And two weeks ago, Smith sent testimony to lawmakers backing a bill that would recoup an estimated $528 million in "stranded costs," money ratepayers paid Constellation for an expected plunge in value to its power plants, a loss that never occurred.

"I believe my clients are entitled to that money," said Smith, adding she was not at the agency when the agreement was settled. "That agreement was not in their best interests."

kelly.brewington@baltsun.comSun reporter Andrew A. Green contributed to this article.

Copyright © 2014, The Baltimore Sun
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