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Rate bill passes

THE BALTIMORE SUN

A plan to hold this summer's BGE electricity rate increase to 15 percent and fire the Public Service Commission passed the General Assembly early this morning with veto-proof majorities in both chambers, a major turn in a saga that has dominated Maryland politics for months and brought anxiety and confusion to BGE's 1.2 million residential customers.

"It's the best proposal that's been on the table thus far," said Senate President Thomas V. Mike Miller. "It's taken a lot of hard work. It's like the Age of Aquarius. On this day everything came together."

Gov. Robert L. Ehrlich Jr. got none of the amendments he said he would need to persuade him to sign the bill. But the legislation passed the House and Senate with more than enough votes to override a potential gubernatorial veto, and legislative leaders said they will reconvene to override if necessary.

The Senate vote came at about 9 p.m. on the first and only day of a special session called to address the electricity crisis; the House vote came after 12:30 a.m. today.

The news in March that BGE electric bills would go up 72 percent with the July 1 expiration of six-year rate caps led to an outcry from consumers and frantic efforts by lawmakers to avert a potential election-year anti-incumbent movement.

Rates are rising as part of an energy deregulation plan passed by the General Assembly in 1999, now being fully implemented at a time of rising energy costs and worldwide market instability.

Robert L. Gould, a spokesman for BGE parent company Constellation Energy Group, said the utility doesn't agree with all aspects of the bill, but he said it is pleased to see some finality to the issue for customers.

"We've said from the start that our top priority was a plan that helped BGE's residential customers manage the July 1 adjustment to market prices, while at the same time assuring the financial strength and viability of BGE," Gould said. "This bill appears to meet both objectives."

The legislature wrapped up its special session in one tiring day, accomplishing what it failed to do during the annual 90-day legislative session that ended this spring. Each day the legislature spends in Annapolis costs taxpayers about $45,000, state officials say.

Ehrlich made no public comments after the Senate vote, but earlier in the evening he said he didn't like the direction it was going. On Tuesday, he had complained that the bill would be damaging to BGE and its corporate parent, Constellation Energy Group, but yesterday he said the legislature was giving too much to the company.

"It's fascinating because the amendments appear all to be going Constellation's way against consumers, and that's obviously of interest to us and not a positive sign," Ehrlich said.

Republican legislators met with Ehrlich for an hour yesterday afternoon to craft amendments the governor said he hoped would both aid consumers and help ensure the success of the pending merger between Constellation and Florida-based FPL Group Inc.

Without them, he said, he wouldn't hesitate to veto the legislature's efforts to help BGE customers deal with the pending increase

"You've got that right," Ehrlich said. "If, on the other hand, they improve the bill, if they make it more consumer-friendly, if they depoliticize it, if they protect the merger, I'll sign it."

None of the Republicans' amendments passed the Senate. The governor would have six working days - not counting Sunday - to decide whether to sign the bill, veto it or let it become law without his signature.

The proposal that prompted the most debate was an amendment to preserve the Public Service Commission. The commissioners have been pummeled by Democrats and some Republicans for not acting sooner to thwart the rate increase.

A Baltimore circuit judge ruled last month that they failed in their duty to look out for consumers, and the state Open Meetings Compliance Board said they had held an illegal closed meeting.

The agency has also been criticized for being too cozy with utility company executives, a claim bolstered by e-mails showing that commission Chairman Kenneth D. Schisler discussed strategy with industry lobbyists and planning a hunting trip and other social outings with a utility company official.

Sen. J. Lowell Stoltzfus, a Somerset County Republican, argued that although "some of the [PSC's] behavior was inappropriate" the entire commission should not be punished. He blamed the previous members of the Public Service Commission, individuals who sat on the board in 1999 when the rate plan was signed, for the 72 percent rate increase.

"My problem is when we blow up a whole commission it destabilizes it," Stoltzfus said.

Some Republicans said dismissing the PSC sets a bad precedent. "It's not appropriate to fire people because we disagree with their decision," said Sen. Allan H. Kittleman, a Howard County Republican.

Others asserted that the commissioners had shown they had forgotten their main mission - to advocate for consumers.

"We don't like the behavior of the Public Service Commission, and we realize that there has to be change," said Sen. Paula C. Hollinger, a Baltimore County Democrat.

If the governor signs the bill or if it is enacted over his veto, it appears unlikely to draw a lawsuit from Constellation Energy, a result that could have extended consumers' uncertainty for months.

Constellation officials said that concessions made by the legislature yesterday give the company the financial security it needs while customers make the transition to market rates.

With little debate, the Assembly approved a key concession requested by Constellation: The date at which all customers will pay market rates for electricity would be Jan. 1, 2008, instead of June 1 of that year. Company officials said that change would help it maintain its credit rating, which is crucial for BGE because of the large amounts of money it must borrow to maintain its distribution lines.

The legislature also agreed to change the plan for how rates would be determined from June 1, 2007 - when the 15 percent cap on the rate increase expires - until customers pay market price. In that period, consumers will either begin paying full market rates or have the chance to participate in a transitional rate-stabilization plan.

That mechanism helps guarantee BGE's ability to fully recover its costs, but participation would add to the monthly fee that customers have to pay.

The bill could still face a legal challenge from the PSC. When the legislature passed a similar bill during the legislative session, Schisler, the board chairman, filed a suit in the circuit court of Talbot County, where he lives and practiced law, challenging its constitutionality.

The commission won a temporary injunction, but the suit became moot when Ehrlich vetoed the bill and the legislature failed to override.

PSC spokeswoman Christine E. Nizer said firing the commission would do nothing to help BGE ratepayers, but she said no decision has been made about whether to revive the lawsuit.

In the bill being considered yesterday, the Assembly included several provisions designed to reduce the likelihood that a second suit would be successful.

It stipulated that any challenges to the constitutionality of the statute would have to be filed in Baltimore Circuit Court - a move to keep Schisler out of his hometown courthouse. It also said that no public funds could be used to finance a suit; Schisler used PSC money to hire a partner from his former law firm to file the first suit.

Supporters of the plan said the PSC failed to protect consumers, failed to ask any tough questions of the utility and failed to follow its own rules in its quick approval of an earlier plan to defer the rate increase.

"There were opportunities for this Public Service Commission to protect the consumer," said Sen. E.J. Pipkin, an Eastern Shore Republican and one of the Assembly's leaders on rates issues. "They chose a different path."

The legislature also added amendments yesterday to provide some rate relief for customers of PEPCO in suburban Washington and Delmarva Power on the Eastern Shore.

One thing last night's votes appear almost certain not to change is the intense politicking around the issue. It has taken center stage in the governor's race, with Ehrlich saying the legislature's plan is another example of the excesses of Democratic leadership and the governor's opponents claiming the Republican has sided with corporate interests against consumers.

Ehrlich said yesterday that Democrats have made sure "that the people get socked" and have again sent terrible signals to the world that Maryland is hostile to business. He said he will not hesitate to take that message to the campaign trail.

One of Ehrlich's prospective opponents, Baltimore Mayor Martin O'Malley came to Annapolis last night to watch the final votes in the House of Delegates. O'Malley has already begun running campaign commercials on television spotlighting his efforts to secure rate relief.

He said it isn't surprising that Ehrlich wasn't involved in crafting any of the legislation in the special session and proposed no ideas of his own.

"He's not a person that's as committed to finding solutions as he is to casting aspersions and trying to divide and belittle those that would try to make government work," O'Malley said.

andy.green@baltsun.com jennifer.skalka@baltsun.com

The rate plan

The state Senate and the House of Delegates approved a plan last night to defer the full impact of a 72 percent average increase in BGE electricity rates. The measure would:

Limit the rate increase July 1 to 15 percent.

Allow BGE to charge full market rates on Jan. 1, 2008.

Assess a $5.02 average monthly fee to customers beginning Jan. 1, 2007. Concessions from the company would effectively reduce the fee, which would last 10 years, to $2.19 or less.

Allow customers to choose on June 1, 2007, whether they want to extend rate relief for seven more months.

Replace the Public Service Commission with members chosen by the governor from a list prepared by the legislature.

What's next

The governor has six days, excluding Sunday, to act on the measure.

These are the results of the roll call votes on final passage of the General Assembly's plan for deferring full implementation of the BGE utility rate increases scheduled to take effect July 1.

SENATE

Voting yes (36)

John C. Astle, D-Anne Arundel Gwendolyn T. Britt, D-Prince George's James Brochin, D-Balto. County Joan Carter Conway, D-Balto. City Ulysses Currie, D-Prince George's James E. DeGrange Sr., D-Anne Arundel George W. Della Jr., D-Balto. City Roy P. Dyson, D-St. Mary's Nathaniel Exum, D-Prince George's Jennie M. Forehand, D-Montgomery Brian E. Frosh, D-Montgomery Robert J. Garagiola, D-Montgomery John A. Giannetti Jr., D-Prince George's Lisa A. Gladden, D-Balto. City Leo E. Green, D-Prince George's Sharon M. Grosfeld, D-Montgomery John J. Hafer, R-Allegany Patrick J. Hogan, D-Montgomery Paula C. Hollinger, D-Balto. County J. Robert Hooper, R-Harford Ralph M. Hughes, D-Balto. City Philip C. Jimeno, D-Anne Arundel Verna L. Jones, D-Balto. City Edward J. Kasemeyer, D-Howard Delores G. Kelley, D-Balto. County Katherine A. Klausmeier, D-Balto. County Rona E. Kramer, D-Montgomery Gloria G. Lawlah, D-Prince George's Nathaniel J. McFadden, D-Balto. City Thomas M. Middleton, D-Charles Thomas V. Mike Miller, D-Prince George's Paul G. Pinsky, D-Prince George's E.J. Pipkin, R-Queen Anne's Ida G. Ruben, D-Montgomery Sandra B. Schrader, R-Howard Norman R. Stone Jr., D-Balto. County Leonard H. Teitelbaum, D-Montgomery

Voting no (11)

David R. Brinkley, R-Frederick Richard F. Colburn, R-Dorchester Janet Greenip, R-Anne Arundel Larry E. Haines, R-Carroll Andrew P. Harris, R-Baltimore County Nancy Jacobs, R-Harford Allan H. Kittleman, R-Howard Alex X. Mooney, R-Frederick Donald F. Munson, R-Washington J. Lowell Stoltzfus, R-Somerset

HOUSE OF DELEGATES

Voting yes (109)

Curtis S. "Curt" Anderson,, D-Balto. City Susan L. M. Aumann, R-Balto. County Charles E. Barkley, D-Montgomery Kumar P. Barve, D-Montgomery Joanne C. Benson, D-Prince George's Elizabeth Bobo, D-Howard County John L. Bohanan Jr., D-St. Mary's David G. Boschert, R-Anne Arundel Joseph C. Boteler III, R-Balto. County Talmadge Branch, D-Balto. City Eric M. Bromwell, D-Balto. County William A. Bronrott, D-Montgomery Anthony G. Brown, D-Prince George's Emmett C. Burns Jr., D-Balto. County Michael E. Busch, D-Anne Arundel Joan Cadden, D-Anne Arundel Rudolph C. Cane, D-Wicomico County Jon S. Cardin, D-Balto. County Jill P. Carter, D-Baltimore City Galen R. Clagett, D-Frederick County Virginia P. Clagett, D-Anne Arundel John W. E. Cluster Jr., R-Balto. County Mary A. Conroy, D-Prince George's Norman H. Conway, D-Wicomico County Robert A. Costa, R-Anne Arundel Jean B. Cryor, R-Montgomery Clarence Davis, D-Balto. City Dereck E. Davis, D-Prince George's Steven J. Sr. DeBoy, D-Balto. County John P. Donoghue, D-Washington Ann Marie Doory, D-Balto. City Kathleen M. Dumais, D-Montgomery D. Page Elmore, R-Somerset Brian J. Feldman, D-Montgomery Peter Franchot, D-Montgomery William J. Frank, R-Balto. County Barbara A. Frush, D-Prince George's Tawanna P. Gaines, D-Prince George's Terry R. Gilleland Jr. , R-Anne Arundel Marshall T. Goodwin, D-Balto. City Melony Ghee Griffith, D-Prince George's Ana Sol Gutierrez, D-Montgomery Peter A. Hammen, D-Balto. City Hattie N. Harrison, D-Balto. City Keith E. Haynes, D-Balto. City Anne Healey, D-Prince George's Henry B. Heller, D-Montgomery Sheila E. Hixson, D-Montgomery Marvin E. Holmes Jr., D-Prince George's Carolyn J.B. Howard, D-Prince George's James W. Hubbard, D-Prince George's Richard K. Impallaria, R-Balto. County Sally Y. Jameson, D-Charles Adrienne A. Jones, D-Balto. County A. Wade Kach, R-Balto. County Anne R. Kaiser, D-Montgomery Darryl A. Kelley, D-Prince George's Nancy J. King, D-Montgomery Ruth M. Kirk, D-Baltimore City Carolyn J. Krysiak, D-Balto. City Sue Kullen, D-Calvert Mary-Dulany James, D-Harford Jane E. Lawton, D-Montgomery Susan C. Lee, D-Montgomery John R. Leopold, R-Anne Arundel Murray D. Levy, D-Charles Mary Ann Love, D-Anne Arundel Richard S. Madaleno, Jr., D-Montgomery James E. Malone Jr., D-Balto. County Adrienne A. Mandel, D-Montgomery Salima S. Marriott, D-Balto. City James N. Mathias Jr., D-Worcester Tony McConkey, R-Anne Arundel Patrick L. McDonough, R-Balto. County Brian K. McHale, D-Balto. City Maggie L. McIntosh, D-Balto. City Herbert H. McMillan, R-Anne Arundel Pauline H. Menes, D-Prince George's Joseph J. Minnick, D-Balto. County Brian R. Moe, D-Prince George's Dan K. Morhaim, D-Balto. County Gareth E. Murray, D-Montgomery Shirley Nathan-Pulliam, D-Balto. County Doyle L. Niemann, D-Prince George's Nathaniel T. Oaks, D-Balto. City John A. Olszewski Jr., D-Balto. County Jeffrey A. Paige, D-Balto. City Rosetta C. Parker, D-Prince George's Joanne S. Parrott, R-Harford Obie Patterson, D-Prince George's Shane E. Pendergrass, D-Howard County Carol S. Petzold, D-Montgomery James E. Proctor Jr., D-Prince George's Catherine E. Pugh, D-Balto. City Neil F. Quinter, D-Howard County Victor R. Ramirez, D-Prince George's Samuel I. Rosenberg, D-Balto. City Justin D. Ross, D-Prince George's David D. Rudolph, D-Cecil County Luiz R. S. Simmons, D-Montgomery Theodore J. Sophocleus, D-Anne Arundel Joan F. Stern, D-Montgomery Herman L. Taylor II, D-Montgomery Frank S. Turner, D-Howard County Veronica L. Turner, D-Prince George's Joseph F. Vallario Jr., D-Prince George's Michael L. Vaughn, D-Prince George's Michael H. Weir Jr., D-Balto. County John F. Wood Jr., D-St. Mary's Bobby A. Zirkin, D-Balto. County

Voting no (26)

Joseph R. Bartlett, R-Frederick Gail H. Bates, R-Howard Adelaide C. Eckardt, R-Dorchester George C. Edwards, R-Garrett Donald B. Elliott, R-Carroll Jeannie Haddaway, R-Talbot Patrick N. Hogan, R-Frederick J. B. Jennings, R-Balto. County Kevin Kelly, D-Allegany Sheryl L. Davis-Kohl, R-Harford Susan W. Krebs, R-Carroll W. Daniel Mayer, R-Charles Susan K. McComas, R-Harford Robert A. McKee, R-Washington Warren E. Miller, R-Howard LeRoy E. Jr. Myers, R-Allegany Anthony J. O'Donnell, R-Calvert Christopher B. Shank, R-Washington Tanya Thornton Shewell, R-Carroll Michael D. Smigiel Sr., R-Cecil Richard A. Sossi, R-Queen Anne's Nancy R. Stocksdale, R-Carroll Paul S. Stull, R-Frederick Mary Roe Walkup, R-Kent Richard B. Weldon Jr., R-Frederick

Not voting

Michael R. Gordon, D-Montgomery Not voting (Excused) Barry Glassman, R-Harford John G. Trueschler, R-Baltimore County Excused absent Donald H. Jr. Dwyer, R-Anne Arundel Marilyn R. Goldwater, D-Montgomery Karen S. Montgomery, D-Montgomery

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