Maryland's top energy regulator asked legislators yesterday for more legal tools to investigate whether Constellation Energy Group has abided by the terms of the 1999 deal to deregulate the state's electric power industry, saying he would not be deterred by the company's threats to sue the state or build a big power plant elsewhere.
Constellation has been in the political crosshairs since its affiliate, Baltimore Gas and Electric Co., announced plans for a 72 percent rate increase two years ago. The company's announcement last week that it would sue the state to recover costs from a 2006 rate reduction agreement and its threats to abandon plans to expand its nuclear plant at Calvert Cliffs have again angered lawmakers in Annapolis.
Steven B. Larsen, chairman of the Public Service Commission, told members of the Senate Finance Committee that he would like to clarify the commission's authority to order refunds to ratepayers if it finds that Constellation violated the terms of the 1999 deregulation deal - although he stressed that the panel has made no such finding.
Legislators, feeling the heat from a public still angry about soaring electricity costs, pressed Larsen for what his investigation might produce.
"What can I tell my constituents back home?" asked Sen. George W. Della Jr., a Baltimore Democrat.
"We're working hard to find out if there's any opportunity for refunds," Larsen said.
He also said the PSC wants clearer authority to subpoena and examine any affiliate of a public utility in the state. Larsen said the PSC has found that more than $135 million paid by ratepayers for the eventual decommissioning of the Calvert Cliffs nuclear power plant was being held by an unregulated affiliate of Constellation.
Larsen said his panel's investigation has found that the 1999 deregulation deal understated the likely costs to dismantle the nuclear plant in Calvert County. Ratepayers have been contributing too little annually toward the eventual decommissioning, he said, and could see increased charges on their bills in future years to come up with as much as $5 billion in all by the time the facilities are scheduled to be permanently shuttered in 2036.
Constellation has strenuously denied the commission's overall finding that the complicated 1999 deal was lopsided in favor of the company and cost ratepayers $1.1 billion.
Last week, in an escalation of the dispute, the company notified the state of its intent to sue to recover $386 million in credits granted to ratepayers under 2006 legislation meant to soften the residential rate increases.
"The lawsuit is, to me, disconnected," Larsen told lawmakers yesterday, when asked what impact it might have on the commission's continuing inquiry.
The General Assembly had directed the commission to review the deregulation agreement, he pointed out, and the commission has scheduled a hearing for today to give Constellation officials an opportunity to rebut the report.
Larsen said it would be "an unfortunate outcome" if Constellation followed through with another threat to build a nuclear reactor in New York instead of Maryland. The company has said that it hopes to begin construction this year on a 1,640-megawatt reactor in Lusby, with completion expected by 2015.
The regulator said such a large power plant would be key if the state hopes to avoid energy shortfalls in the next several years. He said other, smaller power plants in the pipeline, as well as consumer conservation efforts, might close the expected gap between demand and supply in the next few years. But the other projects in planning won't make up the difference if the Calvert Cliffs plant is not expanded, Larsen said.
Not all lawmakers are eager to see Larsen continue to investigate Constellation.
"Is there any kind of end in sight?" asked Sen. Katherine A. Klausmeier, a Baltimore County Democrat.tim.wheeler@baltsun.com