Gov. Martin O'Malley could name a replacement for Public Service Commission Chairman Kenneth D. Schisler by the end of the week as part of his effort to install more consumer-friendly regulators, but lawmakers warned yesterday that he should be careful not to make the commission anti-business in the process.
Schisler's abrupt resignation Monday came as a surprise to many in the legislature and the administration, but O'Malley had already been vetting candidates for another empty seat on the commission, which regulates electric utilities, phone companies, taxicabs and other public services. Leaders in the General Assembly also compiled a list of candidates for the PSC last year when they attempted to fire Schisler and the other four commissioners.
Those close to the situation say it is imperative that O'Malley act quickly to take control of the PSC to provide stability for the utility industry and to move forward on reforms to prevent a repeat of the shock BGE customers experienced last year when the company announced a 72 percent rate increase.
"We have some very critical issues with the evaluation of deregulation," said Sen. Thomas M. Middleton, the Finance Committee chairman from Southern Maryland. "Those issues need to be before the PSC, not the legislature."
Schisler's resignation has set the rumor mill in Annapolis buzzing with speculation about why the chairman chose to resign and whom O'Malley will nominate as a replacement.
Several legislators said they met with Schisler last week to find out if there was a way to persuade him to step down. O'Malley came into office with a pledge to fire him, and the lawmakers said they hoped to find a way to avoid unpleasantness. As of late last week, legislators said, Schisler was intent on fighting to keep his job, a prospect that panicked utility officials and others with business before the commission who feared months of instability.
Senate President Thomas V. Mike Miller said a third party - perhaps a utility company - probably intervened to help settle the issue. Schisler's financial position was precarious, Miller said, and he had insisted that he be compensated for the legal bills he amassed while trying to keep his $117,000-a-year job.
"He was a broken man," Miller said. "He's a young attorney with a young family and large debts."
PSC spokeswoman Bethany Gill said Schisler was not available for comment yesterday afternoon. He has not spoken publicly since he announced his resignation, which takes effect at the end of the week.
O'Malley aides said yesterday that the governor will move fast to replace Schisler and to fill the other vacancy on the commission. People mentioned as potential nominees include Susanne Brogan, a former PSC member, and Michael J. Travieso, a former people's counsel.
Both of them were on a list of candidates Miller and House Speaker Michael E. Busch compiled last summer, when it appeared that the General Assembly would get to choose new commissioners.
The list also included retired Baltimore circuit judges Joseph H.H. Kaplan and Thomas J.S. Waxter Jr.; Raymond E. Beck Sr., a former Republican legislator from Carroll County; and Lawrence Brenner, an administrative law judge with the Federal Energy Regulatory Commission.
Critics of the PSC say it is crucial for new commissioners to be appointed quickly because the General Assembly last summer directed the commission to conduct reviews of the state's entire regulatory structure and to craft a new rate deferral plan to help those who can't handle the next BGE increase, a rise of nearly 50 percent to take place in June.
But lawmakers did so on the assumption that their plan to fire the commissioners would stand. Schisler, a former Republican delegate from the Eastern Shore, sued, argued that only the governor has the authority to fire commissioners, and only for cause. He won in the Court of Appeals.
In the meantime, the commission has taken testimony on the structure of Maryland's electricity markets and made some preliminary changes in the process by which utilities bid on power contracts. But recommendations on many of the most pressing issues are yet to come.
Del. Dereck E. Davis, the Prince George's Democrat who chairs the Economic Matters Committee, said the governor needs to be careful that he doesn't go too far. The Office of the People's Counsel is designated to represent consumers in utility regulation, but the PSC needs to balance the needs of consumers and businesses, Davis said.
"We all want a consumer-friendly board, but we need to remember these people's job is to call the balls and strikes," Davis said. "If we put on an all-consumer-advocate board and they go the other way with it, that has ramifications in the business world."
The major utility companies in the state - Constellation Energy Group Inc., which owns BGE, and Pepco Holdings, which provides power in the Washington suburbs and the Eastern Shore - have generally steered clear of discussing the composition of the PSC for fear of appearing to lobby for or against the people who will regulate their activities. But they have said the instability at the PSC is bad for business.
Paula M. Carmody, who is awaiting confirmation as the new People's Counsel, also declined to comment on the current commission or Schisler's resignation. But she said it's imperative that the PSC recommend a course for regulation in the state within the next several months.
"The most important thing is that we need commissioners that are familiar with the industry and have experience that they can bring to the table and move very quickly," Carmody said. "They need to have an understanding of the consumer and business perspective. I would underscore both of those."
Sun reporters Justin Fenton and Laura Smitherman contributed to this article.