In '99, Ehrlich voted for deregulation

THE BALTIMORE SUN

Gov. Robert L. Ehrlich Jr. has repeatedly referred to himself a "neutral arbiter" in negotiations with Constellation Energy Group over rising electricity rates, saying a problem was dumped in his lap as a result of a deregulation plan passed by the General Assembly in 1999 when he was in Congress.

At the time, however, Ehrlich was a notable supporter of lifting regulations on power companies. As a Republican member of the House Energy and Power subcommittee, he was one of 16 congressmen to vote in October 1999 for a bill to lift federal regulations on power companies and to encourage states to make decisions to foster competition.

The vote came just months after the Maryland General Assembly passed its deregulation bill. While the House measure cleared the 31-member subcommittee, it did not proceed further.

There was a flurry of power company lobbying in favor of the bill, according to the Center for Responsive Politics, a nonpartisan organization that tracks money in politics. Federal Elections Commission data analyzed by the center show that Ehrlich received $19,222 in utility industry contributions that year, the sixth-highest amount collected by a member of the subcommittee.

A spokesman for Ehrlich said the governor has never opposed energy deregulation, and he has been critical of limits on rates that have been part of Maryland's plan but were not contained in the federal bill.

Singling out Maryland's Democratic Senate president for blame, spokesman Henry Fawell said in an e-mail response to questions that "Mike Miller's deregulation plan failed, due in large part to its rate cap provision."

Maryland's caps are due to be lifted July 1, when electric rates will rise 72 percent for BGE customers who do not enroll in a phase-in plan that the governor negotiated with Constellation, the electric utility's parent company. Those who do opt in will pay market rates by 2009 and an interest charge for much of the interim.

During the current campaign finance cycle, Ehrlich has received $33,000 for his re-election bid from Constellation and its top executives, according to state records.

Other FEC records show that Ehrlich accepted nearly $12,000 in free trips paid for by power companies and lobbyists during his final three years in Congress before becoming governor.

In April 2000, he and his wife, Kendel, flew to Fort Myers, Fla., for a five-day visit that included a power plant inspection. The $1,962 cost of the trip was paid by Florida Power and Light. Five years later, the firm agreed to a merger with Constellation that is now pending.

In August 2001, Ehrlich traveled to the Arctic coastal plain in Alaska on a $9,963 trip paid in part by Arctic Power, a lobbying group that supports oil and gas exploration in the Arctic National Wildlife Refuge, FEC records show. Again, Kendel Ehrlich accompanied him.

The governor said last week that the deal he reached with Constellation was the best one possible for ratepayers, but many critics say the phased-in rate increases are no help at all -- and would save the average customer virtually no money over three years.

Miller said the governor "was nowhere close to being a neutral arbiter" during talks that resulted in an agreement that the Assembly failed to approve on the final day of its session this month.

"The reason we couldn't get a deal was because he sided with Constellation and BGE on every issue," Miller said.

"I don't think anybody ever thought Ehrlich was capable of being a neutral arbiter, as soon as the words came out of his mouth," said Tom Hucker, executive director of Progressive Maryland, a liberal advocacy group that has monitored the rate negotiations.

"He's always been cozy with the power companies," Hucker said. "I don't see him going on any exotic vacations with ratepayers from Dundalk, or golfing with senior citizens who have to choose between prescription drugs and their electric bills."

Fawell, the governor's spokesman, countered that "the legislature had seven years and 90 days to clean up an electricity price mess they created in 1999.

"Governor Ehrlich spent weeks successfully prying $600 million from Constellation that goes directly to protecting working Marylanders," he said. "It's pretty clear who is on the side of working families and who is not."

Sen. David R. Brinkley, a Frederick Republican who voted for the deregulation bill in the House of Delegates in 1999, called Ehrlich "the right guy for the right time" to strike an agreement because of his knowledge of the issue from his congressional tenure and because he did not take part in developing the state's 1999 plan.

"It sounds to me like he has taken what he could, and made lemonade out of it," Brinkley said.

But Sen. E.J. Pipkin, an Eastern Shore Republican and former Wall Street investment banker, called the Ehrlich-endorsed plan a "credit-card approach" that temporarily defers higher costs and does not provide permanent relief.

"I wanted to go in a different direction," Pipkin said, referring to legislation he sponsored that sought to recoup $528 million BGE was allowed to collect in "stranded costs" from ratepayers. The money was to compensate for a decline in the value of power plants that never materialized. Ehrlich vetoed the bill.

"This is not a burdensome deal for Baltimore Gas and Electric," Pipkin said. "I wish we were going down a different path, but we're not."

The federal bill Ehrlich voted for in 1999 also included a provision to reimburse energy companies for stranded costs, a concept that consumer advocates at the time denounced as a corporate giveaway.

"Just as state legislators are allowing one of the largest corporate bailouts in history, so too would federal legislators," wrote Charles B. Higley, research director for Public Citizen, to the chairman of the House Commerce Committee.

Asked if Ehrlich's recent negotiations appear to be affected by his utility industry connections, Hucker, of Progressive Maryland, said: "The proof is in the pudding. ... The deal stinks."

"You have to believe that Constellation got a signal that if they just waited out the General Assembly, they would get a better deal from Ehrlich. Constellation is just at the heart of his political base. The idea that he negotiates on behalf of consumers is like Romeo negotiating with Juliet."

Ehrlich is not the only Maryland politician to receive substantial donations from energy sources. Also on the congressional energy subcommittee in 1999 was Rep. Albert R. Wynn, a Democrat from Prince George's County, who received $17,899 in industry donations that year -- the seventh-highest amount. He voted against the deregulation plan.

Reached this week, Wynn said he could not recall the details surrounding the 1999 vote. He did not want to comment on Ehrlich's handling of the BGE negotiations.

Several other Democrats, including Ehrlich's two principal rivals for governor -- Baltimore Mayor Martin O'Malley and Montgomery County Executive Douglas M. Duncan -- have also received money from energy interests.

O'Malley has collected $32,750 from Constellation during the current cycle, about the same as Ehrlich.

Duncan returned $3,205 in Constellation donations and has said both O'Malley and Ehrlich are too close to the utility company to broker a good deal for customers. However, state election records show that Duncan has collected $1,750 from a political action committee affiliated with Pepco, the main power supplier for the Maryland suburbs of Washington.

A national political action committee headed for years by Miller, the Democratic Legislative Campaign Committee, which seeks to elect Democrats to state legislatures, received $119,500 in power company donations in the three years after the deregulation vote, according to figures provided by the governor's office.

Miller said yesterday that the money was used in legislative elections in California, Texas and many other states. "I never got a dime from that money," Miller said. "I never solicited 10 cents from a utility company."david.nitkin@baltsun.com

Sun reporter Andrew A. Green contributed to this article.

An article in the Maryland section yesterday gave an incorrect source for information about trips taken by Gov. Robert L. Ehrlich Jr. while in Congress. The data were compiled by PoliticalMoneyLine and by American RadioWorks based on congressional filings, and are not maintained by the Federal Election Commission.The Sun regrets the errors.
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