Legislation that would let Marylanders choose their electricity suppliers won final approval from both houses of the General Assembly yesterday, setting up a potential clash with Gov. Parris N. Glendening over environmental and consumer protections.

By wide majorities, the House and Senate passed similar bills that would open the electricity market to competition, starting next year. Leaders of both houses pledged to work out the differences in a conference committee.

The votes -- 99-36 in the House, 37-9 in the Senate -- were major victories for the state's business community, and for electric utilities in particular, which see big money in deregulation.

Business and industry hope to save millions by shopping around for power, and one major manufacturer -- Eastalco Aluminum in Frederick -- has publicly warned that its 600 jobs depend on reducing the smelting plant's electricity costs. Utilities such as Baltimore Gas and Electric Co. also favor deregulation, seeing in it a chance to compete with other energy suppliers.

But consumer and environmental activists contend that residential electric customers could wind up paying more for power, and deregulation could worsen the state's air pollution problems. They called on Glendening yesterday to veto any bill that reaches his desk, unless it is changed to meet their objections.

"The governor is the one who can stop this thing," said Dan Pontious, executive director of the Maryland Public Interest Research Group. "I think if he lays down the law, he'll get some results."

Glendening has insisted on a five-year, 7.5 percent rate cut for residential customers. The two bills passed yesterday call for smaller reductions. The governor also wants safeguards against allowing cheap power from older, more polluting coal-burning power plants to be sold in Maryland. He plans to keep pressing for those points when members of the two chambers get together to agree on a common version of the bill, according to his spokesman, Ray Feldmann.

But Senate President Thomas V. Mike Miller suggested Glendening should not stand in the way of deregulation legislation.

"The governor's also got to be concerned about businesses in the state of Maryland, as well as consumers," Miller said before yesterday's vote. The Prince George's County Democrat said that the "difficult balance" lawmakers have struck among all the competing interests "is going to dictate that he sign it into law."

Supporters contend that Maryland must open its power industry to competition to keep pace with neighboring states, most of which have at least begun deregulation.

"We have to keep on the cutting edge of attracting business, and of keeping our utilities here," said Sen. Thomas L. Bromwell, chairman of the Finance Committee. The Baltimore County Democrat said he particularly wanted to ensure that BGE -- with 10,000 employees in the state -- survives and prospers.

"We're not leaping ahead of neighboring states that seem more business-friendly than we are," Bromwell added. "We're just trying to catch up."

But critics warned that the bills are too business-friendly, at the expense of Maryland's residents and its air quality.

"What are we going to do about the 5 million people we represent?" asked Sen. Paul G. Pinsky, a Prince George's Democrat. "At what point do we think we gave too much away?"

Sen. Leo E. Green, another Prince George's Democrat, complained about the heavy lobbying from utilities. BGE paid more than $100,000 this week for a four-page ad in The Sun supporting the deregulation legislation, and Green said utility employees have been calling his office to urge its passage without further changes.

"History is about conflict, and politics is about power," Green said, as lobbyists for BGE and other parties looked on from the spectators' gallery. "But business is about gain, and that's what worries me about this."

Robert Fleishman, BGE's vice president for corporate affairs, said the rate cuts called for in the two bills "continue to be of concern to our shareholders." But he said, "We think the prospects of good deregulation legislation were enhanced by both chambers voting the way they did."

Supporters pointed out that the measures were amended to address consumer and environmental concerns. For residential customers who stay with their current utility, the House bill calls for a 3 percent to 7 percent residential rate cut for three years. The Senate approved a minimum 3 percent decrease for four years.

Both bills also set up a fund to help poor people pay their power bills. The Senate would provide at least $34 million, while the House capped it at $24 million. The money would be raised by levying a fee on every electric customer in the state -- though in the House version businesses would finance 80 percent of the fund.

The rate cuts are to be set by the Public Service Commission, and each bill lets the commission order a smaller or no reduction if it determines utilities would be unduly harmed. Some saw that as troubling, and they warned that electricity prices would soar once rate caps come off.

"Our ratepayers are going to pay for it long after many of us are gone from this institution," said Del. Leon G. Billings, a Montgomery County Democrat. "That is passing the buck, literally and figuratively."

Critics complained that consumers' prospects for getting cheaper rates would be improved if the bills made it easier for municipalities to buy power on behalf of their residents. They also wanted a fund created to help consumers reduce electricity bills by promoting energy conservation and construction of cleaner, renewable energy such as wind farms or solar collectors.

But Del. Ronald A. Guns, chairman of the House Environmental Matters Committee, said the majority resisted putting too many new programs in the legislation, for fear they would prevent homeowners from realizing any savings.

Pub Date: 3/27/99