Republicans part ways on BGE

THE BALTIMORE SUN

Gov. Robert L. Ehrlich Jr. is used to being on the other side of the General Assembly on the biggest issues of the day, and the scramble to fend off a sharp rate increase from Baltimore Gas and Electric Co. has played out true to form, but with an unusual twist: Some of the strongest voices in the opposite camp are coming from fellow Republicans.

Ehrlich has mocked measures that the General Assembly passed last week in an effort to gain leverage toward reducing a 72 percent electric rate increase scheduled for July.

But the sponsor and most forceful advocate for one of the bills - requiring the return of $528 million that the company received for its power plants - is a Republican senator with solid pro-business credentials, E.J. Pipkin of the Eastern Shore. Some of the strongest critics of the Public Service Commission, packed with Ehrlich appointees and under fire for not protecting consumers enough, are Republicans.

And more Republicans voted for a measure that would give the Assembly veto authority over an $11.4 billion merger between BGE parent Constellation Energy Group and Florida's FPL Group than voted against it.

"I'm tied for the top business rating in the Senate, but my constituents and what's going on in their lives is more important to me," said Sen. Nancy Jacobs, a Harford County Republican, after voting for a bill that would give the legislature veto power over the proposed merger.

"I really hope this wakes them up to realize the citizens of Maryland aren't bluffing," she said.

For years, Ehrlich has pitched business-friendliness as a major dividing line between his administration and the Democrat-controlled General Assembly.

And on key votes - such as a bill forcing Wal-Mart to pay more for health care, an increase in the minimum wage and tax issues - Republican legislators have lined up eagerly to support him.

But not this time. Just as President Bush recently saw Republican lawmakers break from him over the deal to sell some port operations to a Dubai firm, Ehrlich has watched members of his caucus take strident stands against BGE, leaving him nearly alone in his position as a self-proclaimed neutral arbiter between the utility and customers.

The governor has hinted that he would veto all the bills, but they were passed with enough time to spare - and a veto-proof majority - to give lawmakers a chance to overturn the governor's rejection if they are unhappy with BGE rate concessions.

"I respect the governor's opinion, but I don't share it," said Del. Patrick L. McDonough, a Baltimore County Republican who has been outspoken on BGE issues. "This is the most important business in the state of Maryland, Constellation and BGE, and they're talking about selling out. ... The consumers of this state are entitled to a serious, independent, objective review of that process."

While some Republicans are splitting with Ehrlich on utilities issues, it remains clear that a much wider divide exists between Republicans and Democrats as the Assembly session enters its final week.

Contentious bills

Democratic lawmakers rushed Friday to place several contentious bills on the governor's desk in time for possible veto overrides, including measures that would allow polling places to open several days early in Democratic areas, and would prevent Ehrlich's top fundraiser from serving on the University System of Maryland Board of Regents if he wants to raise money for the governor. Republicans briefly walked out of the Senate in protest Friday over what they viewed as over-the-line partisanship.

Still, the BGE debate has been dominant in recent days. The merger bill got the strongest bipartisan support, with seven of 14 Senate Republicans and 21 of 43 House GOP members voting yes. But the other measures also had support in the minority party.

The chief backer of the attempt to recoup the $528 million in so-called "stranded costs" BGE customers paid to Constellation over the past six years for the expected decline in value of its power plants - which rose in value instead - is Pipkin, who was his party's U.S. Senate nominee in 2004.

Pipkin is a former Wall Street bond trader who is generally known for championing free-market solutions to tough problems such as ballooning health care costs. But in committee hearings and closed-door negotiating sessions, he has been among the most aggressive lawmakers in questioning Constellation and BGE officials.

His bill not only demands the $528 million but reimposes caps on BGE rates and forbids the merger until it's returned. Two of 14 Republicans voted for it in the Senate, and it got more than a dozen GOP votes in the House.

Pipkin, who made a name for himself two years ago attacking Sen. Barbara A. Mikulski - one of the most popular Democrats in the state - as "surprisingly liberal," has now been tapped by Senate President Thomas V. Mike Miller as one of the legislature's key negotiators on utility rates and is getting compliments from populist Democrats.

"The Republican senator from the Eastern Shore and I have shared the same views on this from the beginning," Del. Brian K. McHale, a Baltimore Democrat, said about the stranded costs. "He comes from a Wall Street background, and my economic background is more attuned to Main Street."

PSC targeted

Pipkin was the only Senate Republican to vote for the bill to fire the current members of the Public Service Commission, a measure Ehrlich and some Republican legislators have decried as a mean-spirited power grab.

But Pipkin said any notion that the commission, which is controlled by Ehrlich appointees, has done its job in safeguarding the public from rate increases is pure "baloney."

"There hasn't been any effort we can see, tangible, to our customers, that the PSC has fostered any competition in the areas of the state where rate caps have already been lifted," Pipkin said on the Senate floor last week. "They have been in front of us and they have espoused market competition and deregulation, and it hasn't happened."

The PSC bill has gotten less support from Republicans, but not necessarily because they defend the commission. Instead, several said they voted against the bill because they saw it as a power grab against the governor, despite their misgivings about his appointees.

"What is the PSC supposed to be really doing?" Del. Joanne S. Parrott, a Harford County Republican said in a committee meeting last week. "Looking after the citizens, and I sort of feel like they're not doing that. But I feel it's wrong to throw them out in one fell swoop."

Some Republican lawmakers said the reason they have staked out positions independent of the administration on the BGE issue is simply that they haven't gotten a clear sense of what the governor wants to do.

"What is he doing?" said Del. Michael D. Smigiel Sr., a Cecil County Republican who voted for the merger-blocking bill. "What is his position?"

Ehrlich communications director Paul E. Schurick said legislators - many Republicans included - are just riding the passions of election-year politics by endorsing the utility company measures.

It is the governor who is "doing the heavy lifting" to resolve the situation, not them, Schurick said.

"If the legislators choose to do the right thing, this crisis is averted and these bills die," Schurick said. "If they choose to do the wrong thing for ratepayers, we have a potential calamity on our hands, and nonsense like firing the PSC, appointing special counsels and silly things like that are going to be afterthoughts in a calamity like they're risking right now."

The bills, especially the one requiring the return of the $528 million, are virulently anti-business legislation that ranks Maryland's legislature as "the worst in the nation," Schurick said.

Del. Warren E. Miller, a Howard County Republican who has worked closely with the administration on the rate increases, said the governor has led on the issue at the negotiating table, not through political histrionics. Miller said the governor has proceeded in a seasoned, calm manner that will ultimately produce the best result.

"You're talking to business people, and I think the governor understands business people," Miller said. "The way the governor is approaching it is the old saying, 'You catch more flies with honey.' ... And every time I sat down at the table and listened, the pot got sweetened."

andy.green@baltsun.com

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