The General Assembly had the right to fire the current members of the Public Service Commission for their handling of a proposed electricity rate increase, a Baltimore circuit judge ruled yesterday in the latest legal blow to the state regulatory agency.
If the ruling is not appealed, the decision by Judge Albert J. Matricciani Jr. clears the way for the dismissal of the panel tomorrow and the appointment of a new commission by July 15.
After hearing 90 minutes of testimony, Matricciani denied a request for a preliminary injunction that would have blocked the firings from taking place as scheduled.
Filed Monday by PSC Chairman Kenneth D. Schisler, the request for the injunction was the latest chapter in a months-long battle over proposed BGE electricity rate increases that has pitted Republican Gov. Robert L. Ehrlich Jr. and his four appointees to the commission against the Democratic-controlled legislature.
Schisler's attorney, Andrew Radding, said a decision will not be made about whether to file an appeal to the state's highest court until this morning - hours before the current commission is to be dissolved.
Michael D. Berman, the assistant attorney general who argued the case on behalf of the General Assembly, said the court upheld the argument that the legislature has the power to reconstitute a public body that it created.
"At this stage of the litigation, the court has determined that the legislature validly exercised its supervisory powers," said Berman.
Yesterday's ruling does not affect the rate caps imposed by the General Assembly but focuses solely on the appointments of the PSC.
The General Assembly convened a special session two weeks ago and approved a relief package that put a ceiling on BGE's proposed 72 percent electricity rate increase at 15 percent for 11 months. The bill also dissolved the current PSC, which had been criticized as being too friendly to the utility industry.
Ehrlich vetoed the measure, but the General Assembly reconvened June 23 and quickly overturned his veto.
Under the new law, the governor must select new members of the commission from a list provided by legislative leaders by July 15. Otherwise, Senate President Thomas V. Mike Miller and House Speaker Michael E. Busch will appoint the commission.
In his lawsuit, Schisler argued that only the governor may remove executive appointees from office, characterizing the General Assembly's attempt to appoint a new commission as a politically motivated power grab that violated the principle of separation of powers. "The unconscionable actions of the General Assembly are an unprecedented abuse of power, violate separation of power principles, and are a blatant attempt to deny the opportunity for fair and timely judicial review of an unconstitutional legislative enactment," Schisler's attorney argued in court documents.
In his four-page ruling, Matricciani suggested that there are underlying flaws in Schisler's constitutional argument and said that the plaintiff had not demonstrated he would likely be successful in the underlying case.
"The General Assembly's authority to alter the terms of office of the Public Service Commission ... is not beyond its constitutional authority," the ruling states, "and does not run afoul of the federal Constitution's dictates on separation of powers."
The judge also questioned whether Schisler filed his lawsuit on behalf of the commission or solely as an individual - an important factor, the judge wrote, in determining whether a temporary injunction is proper. Matricciani noted that no other members of the PSC are listed as plaintiffs in the case.
Ehrlich supported the filing of the lawsuit and has defended Schisler and other members of the commission against attacks by his Democratic gubernatorial rival, Baltimore Mayor Martin O'Malley, who for months has called for removal of the PSC.
Ehrlich's communications director, Paul E. Schurick, blamed yesterday's decision on a provision of the new law that required any challenge to be filed in Baltimore Circuit Court. Matricciani was appointed to the city bench in 1994 by then-Gov. William Donald Schaefer.
"We've come to expect this kind of thing," Schurick said.
Matricciani ruled in favor of the O'Malley administration in a lawsuit filed in May that alleged the commission failed to adequately assess whether the proposed 72 percent electrical rate increase was justified. Many lawmakers said that ruling prompted them to revisit the issue of the rate increase.
In addition to dictating where Schisler - a former Republican delegate from the Eastern Shore - could file the suit, the new law also prohibited him from using public funds for the challenge. PSC officials have not said who is funding the suit.
The law also directed the appeals process that Schisler must follow if he decides to continue with the case. The Circuit Court's decision must be appealed directly to the state's highest court, the Court of Appeals, and must be made within 10 days of yesterday's ruling. The law requests the court to expedite review of the case to the "greatest possible extent."
Schisler's attorney, Radding, said he would review the case and make a decision this morning.
"We're considering our options. I can't tell you right now what our response is going to be," he said.
Christine E. Nizer, a spokeswoman for the commission, did not return phone calls seeking comment.
Even if Schisler does not appeal the ruling for an injunction, he could pursue in Baltimore Circuit Court the argument that the General Assembly exceeded its authority in firing the PSC. But he would have to do so as the former chair of the commission.
The General Assembly passed a bill to replace the PSC last spring after many Democrats, including O'Malley, argued that the public's confidence in the commission was shaken by its handling of the BGE rate increase case and by revelations that Schisler had exchanged e-mails with an industry lobbyist to cooperate on legislative action.
Schisler sued then in Talbot County Circuit Court, winning a temporary restraining order blocking the bill. The Court of Special Appeals upheld that restraining order. But the action was made moot by a gubernatorial veto of the measure.
Sun reporter Andrew A. Green contributed to this article.