The New Year seems certain to bring Gov. Martin O'Malley back into the energy regulation game.
It's the eve of 2009, but a year from now, he'll be immersed in a campaign for re-election. He'd like to be running on a record of rate relief for consumers of electricity - and possibly re-regulation of the energy industry.
Thus, at the governor's urging, Attorney General Douglas F. Gansler recently held that the Public Service Commission has the authority to review a blockbuster deal struck between Constellation Energy Group and one of its shareholders, Electricite de France.
Mr. O'Malley had seemed determined to pursue to pursue tighter regulatory controls, but after a few early gains, his approach has been tentative.
His return to the game - if it bears fruit - could blunt the inevitable charge that he failed to produce the fundamental change he promised two years ago during his race with Gov. Robert L. Ehrlich Jr.
The dramatic rise in utility rates gave him great campaign leverage. The cost to ratepayers had gone up 70 percent after Mr. Ehrlich's PSC seemed to allow enormous increases with a less than rigorous examination of the case for them.
As mayor of Baltimore, Mr. O'Malley had gone to court to stop the increases. He won time to pursue a better deal. The General Assembly stepped in to provide a year's grace.
He appeared to be moving methodically toward the change he promised. He reconstituted the rate-setting authority, appointed a new Public Service Commission and won a $170 rebate for consumers
But instead of pushing for the big prize, re-regulation, the O'Malley administration pocketed its early wins and cut a deal with Constellation, which had worked hard to get back in the governor's good graces. The company desperately wants to build a third nuclear plant at Calvert Cliffs, known in the conversation as Calvert 3. Here was leverage for the governor to secure more concessions.
That leverage and a number of other factors finally led to Mr. O'Malley's return to the issue.
Generally, the guys in political leadership are good at government. It's what they know. They're less secure in the world of finance, and may be rattled by rich business executives who warn that government could harm - or fatally weaken - a critical industry. The O'Malley administration particularly wanted to avoid anything that might force the company into bankruptcy. Constellation was moving in that direction on its own.
Suddenly, the energy men with their multimillion-dollar golden parachutes were looking more than a little vulnerable. Falling victim to some of the risk-taking excesses that have undone Wall Street, they had even less ability to resist the idea that utilities ought to be reigned in.
Constellation really lost traction when it was forced to raise capital to cover some of the speculative deals it had made. It grabbed what looked like a panicky, fire-sale offer from Warren E. Buf, the fabled trader who specializes in scooping up wounded properties at far better than bargain prices.
That arrangement infuriated Constellation shareholders who found the price far too low. The problem grew into a major embarrassment when the French company offered to pay $4.5 billion for only a portion of Constellation, while Mr. Buffett offered $4.7 billion for the whole thing.
Mr. O'Malley's evolution into a more aggressive regulator arises also from his personal and political identification with working families. The spectacle of so many high-rolling players getting bailed out gets his juices flowing. A consultant recently suggested that re-regulation of the utility industry could save $1.6 billion or more over 30 years.
A result like that, if coupled with re-regulation, would improve Mr. O'Malley's re-election prospects.
Note to readers: This is my last column for The Baltimore Sun. It marks the end of almost 31 years with the newspaper. I've enjoyed almost every minute of it - writing this column in particular. Some kind readers tell me it's the first thing they read on Sunday mornings (right after sports, a few are quick to add). Let me just say thank you for reading in whatever order.
C. Fraser Smith is senior news analyst at WYPR-FM. His e-mail is firstname.lastname@example.org.