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Ehrlich's reticence on BGE criticized


Gov. Robert L. Ehrlich Jr. said yesterday that the 72 percent rate increase that BGE customers face this summer is too much for them to absorb and that he will pursue options to lessen the burden.

But he did not specify the steps he would take.

The governor's hands-off approach to what has developed into the state's hottest consumer issue sparked criticism yesterday even from members of his own party.

Ehrlich's most concrete effort to date was a January letter asking the state Public Service Commission to examine the rate increase. The PSC recommended this week that customers who can't afford to pay the higher bills all at once be allowed to delay them and be charged 5 percent interest.

"I don't sense any movement from the administration to do anything different from the PSC to solve it," said Sen. E.J. Pipkin, an Eastern Shore Republican who was the party's nominee for U.S. Senate in 2004.

Pipkin is a member of the Finance Committee, which handles utility issues.

He said he sees a real bipartisan focus by legislators to deal with the rate increases. But he said the governor has not joined in.

"I think their view is the PSC recommendation is the way to go," Pipkin said.

House Speaker Michael E. Busch said there will be a rate increase for BGE customers, but the legislature will make sure it's less than the 72 percent announced by the utility company this week. The governor, he said, has not been involved in the effort.

"The people that are in here resolving the issue ... are members of the legislature from both political parties," Busch said. "I think it's appropriate for the governor to weigh in. He's written a number of letters to the Public Service Commission expressing concerns, but I think he ought to play a greater role."

Caps on Maryland's electricity rates are due to be lifted in July, with BGE customers facing an average $743 yearly increase. The limits were imposed as part of a 1999 deregulation law, and lawmakers who supported the plan expected that competition would have driven costs down by now.

The politics of the rate increase have taken center stage in the General Assembly session, with lawmakers scrambling to find a way to address a bread-and-butter issue for millions of voters in an election year.

Both political parties tried yesterday to blame the other for the increase and how it has been addressed. But Ehrlich has not attempted to exercise the power of his position as he has on issues he has identified in the past as crises, such as ballooning medical malpractice insurance rates.

More than a dozen utility bills are under consideration in the Assembly, including a plan to block the merger between BGE's parent company and a Florida utility in an effort to gain leverage.

Ehrlich said in a news conference that the PSC plan to automatically enroll BGE customers in a program to phase in the rate increase over two years - which would require them to repay the difference plus 5 percent interest - is "a step in the right direction."

Speaking later on WBAL-AM, he called the PSC plan "not nearly enough."

According to a flowchart of the PSC staff in the Maryland Manual, the chairman of the commission reports to Ehrlich. The governor appoints the commission's members.

"I'm trying to, again, keep all the politics to a minimum, keep all the accusations, who-struck-Johns, who's making how much money, to a minimum, work with the PSC, work with the leadership, work with the membership to get something everything can live with done," Ehrlich said on the radio.

He did not say in either the news conference or his radio appearance what options he is considering.

The state Republican Party, however, issued a news release criticizing Democratic leaders in the legislature for adopting the deregulation plan without a full understanding of the consequences.

Sen. Leo E. Green, a Prince George's Democrat and a leading critic of the merger, said the governor has given no indication of whether he supports or opposes any of the utility legislation under consideration.

Del. Richard K. Impallaria, a Baltimore County Republican who attended a briefing on utilities by PSC Chairman Kenneth D. Schisler yesterday, said he has not seen enough leadership on the issue from the governor.

"When Ken Schisler was in our committee, it sounded like he was more working for Constellation Energy than he was for the citizens of the state of Maryland," Impallaria said.

Schisler defended the PSC's plan in a briefing with House lawmakers yesterday, saying the longer the increase is deferred, the more it might end up hurting customers in the long run.

Charles R. Boutin, a member of the commission and a former delegate, said officials "agonized" over the phase-in plan.

"We tried to look at something to help the consumer get over a difficult time," he said. "We had a very difficult time, but we did the best we could."

Lawmakers of both parties say the state needs to do more.

Green, who has led a Senate work group to study the effects of deregulation, said the only way to lessen the blow of rate increases is to put pressure on the proposed merger between Constellation Energy Corp. and Florida Power and Light.

"The customers are getting shortchanged," he said. "They helped build BGE into the cash cow that they are to attract Florida Power and Light. And now we're getting nothing out of it."

Green said lawmakers should negotiate a deal with the utility that would keep energy rates frozen until the merger is worked out.

Numerous legislative proposals aim to allow lawmakers to have a say on the merger. One of Green's bills requires the General Assembly to approve of utility mergers. Another enables the attorney general to advocate on behalf of the Assembly during hearings on the merger, an effort Green said would ensure that customers' concerns are being heard.

Impallaria said he thinks Maryland should go so far as to re-regulate the utility industry. Pipkin, who unsuccessfully introduced legislation to soften rate increases when caps were lifted for Delmarva Power two years ago, said the legislature needs to look carefully at all the factors contributing to the price increase, including the merger and some proposed environmental regulations.

"The numbers are so huge that you have to just step back and see if this is a total structural failure," Pipkin said.

Sen. Thomas M. Middleton, a Charles County Democrat who is chairman of the Finance Committee, said none of those who supported deregulation imagined that rates could climb as high as they have in the past seven years. He and others said the legislature needs to be careful to make sure any solutions it pursues this time don't create more long-term harm than good.

The call for action isn't universal.

Del. Warren E. Miller, a Republican representing Howard county who serves on the House committee that handles utility issues, said the General Assembly created the problem when it legislated rate caps in 1999. Now some pain for consumers is inevitable, he said.

"I hate to say it, but rate-payers can't expect a free ride," he said. "And that's what some of these bills are out for. And that's unrealistic."

But with leaders in the House and Senate determined to take action, some legislation before the end of the General Assembly session looks almost certain.

"We're going to do something, or we're not leaving here," said Sen. Norman R. Stone Jr., a Dundalk Democrat.

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