The Senate Finance Committee passed legislation yesterday that would allow Maryland electricity customers to choose their power company, drawing support from the business community and opposition from consumer and environmental advocates, who hope Gov. Parris N. Glendening will continue to fight for their interests.

The proposal, which now heads to the Senate floor, guarantees residential consumers a cut in their power bills of about 1.5 percent to 1.75 percent for four years and creates a $34 million-plus program to help poor people afford electricity in the deregulated marketplace.

"I can't tell you that it's a perfect bill," said Sen. Thomas L. Bromwell, chairman of the committee. "But it is a step in the right direction to protect consumers, ratepayers, stockholders and the business community."

Opponents, though, contend that the bill does almost nothing to protect the environment or consumers.

"To us, this is an industry wish list bill," said Dan Pontius, executive director of the Maryland Public Interest Research Group. "It has an insignificant rate cut, it sets us up for a billion-dollar bailout for bad utility investments, and it will result in worse pollution."

A coalition of business interests supports the legislation, arguing that it could save commercial and industrial users 10 percent to 20 percent on their power bills. That could translate to hundreds of thousands -- or perhaps millions -- of dollars a year for the largest electricity users.

Utilities also are backing the bill, in part because it would allow them to be reimbursed for up to $2 billion in investments they made in power plants while they were regulated, when they were guaranteed customers and profits.

Utilities and businesses both said they made concessions to get the bill passed, including the rate cut and the creation of the program for the poor. They also agreed that power companies will have to disclose to customers, once a year, the pollutants their operation creates.

"They forced concessions from all the parties, and I've got the bruises to prove it," said Michael Powell, a lawyer for two dozen of Baltimore Gas and Electric Co.'s largest industrial customers.

But even after 80 hours of deliberation and revision in the Finance Committee, the legislation almost certainly will have to change more to win the crucial support of Glendening.

The governor this week proposed a much larger rate cut of 7.5 percent and urged creation of a public benefits fund that would encourage energy efficiency and promote clean power. But the Senate committee rejected both.

Glendening has said deregulation must include guaranteed protections for the environment and for residential consumers, who some fear may ultimately see higher power bills while big industry negotiates the best deals on electricity rates. The governor has the leverage of the veto pen to get what he wants, and deregulation clearly is not as high a priority for him as it is for the state's top legislators.

A Glendening spokesman refused to comment on the Senate bill last night, except to say that the governor will continue to push for a 7.5 percent rate cut and environmental protections.

BGE and businesses staunchly oppose such a large rate cut for residential consumers, because it would cost the utility tens of millions of dollars a year and could drive up electricity rates for industry. They oppose an environmental benefits fund for the same reasons.

"Our view is that competition is going to lower rates," said Robert Fleishman, general counsel for BGE. "We're concerned that mandated rate reductions will stifle competition."

The environmentalists contend that an environmental benefits fund is vitally important under deregulation. They claim that the power companies will use the cheapest, dirtiest power in the race for profits, and say that under regulation, power companies already pay tens of millions of dollars to encourage energy efficiency.

"This bill slashes -- it eliminates -- energy efficiency spending," Pontius said.

With just three weeks left in the 1999 legislative session, the elec- tricity deregulation issue is not expected to be resolved, if at all, until the final days.

A House committee still is considering its own deregulation bill, which is similar to the Senate's. And should both houses pass their bills, difficult negotiations between both houses and the governor are expected.

Pub Date: 3/20/99