Bill would offer choice of electric companies State Senate panel also OKs BGE switch to holding company

Utilities

March 28, 1998|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

State lawmakers pushed to the full Senate yesterday a bill that would, by July 2000, introduce competition and customer choice into Maryland's monopolistic electric supply system.

"Everyone in the country is doing this," said Sen. Thomas L. Bromwell, a Baltimore County Democrat who chairs the powerful Senate Finance Committee, which approved the bill. "We don't want to be the first, but we sure don't want to be the last. For us not to move is wrong."

The committee also overwhelmingly approved legislation allowing Baltimore Gas & Electric Co. to alter its corporate structure and become a holding company.

The $8.5 billion utility contends that move is critical to its ability to compete effectively in a deregulated market. As a holding company, BGE will be able to obtain financing for its unregulated subsidiaries without seeking approval from state regulators, and will gain other benefits to help it compete in the future.

"I think it's a good compromise," said Thomas S. Saquella,

president of the Maryland Retailers Association and a strong advocate of industry deregulation. "They put in a schedule that we thought was important."

"The state's business community should be happy," said Gary R. Alexander, a lobbyist representing Houston-based Enron Corp. "This will help keep Maryland competitive" with other states.

But BGE probably isn't completely happy with the bill's outcome. The company opposed amendments, including the timetable to introduce competition, contending that the holding company and deregulation issues should have been dealt with separately.

BGE officials at the vote yesterday declined to comment, but committee members lobbied by the utility -- and other state power suppliers -- questioned whether the deregulation schedule is too aggressive.

"We're getting tremendous pressure from the utilities, who are saying they want us to slow this train down," said Sen. Jean W. Roesser, a Montgomery County Republican. "I fear that maybe we are moving too quickly."

Utilities weren't completely shut out by the amendments. Though they objected to the competition timetable, House Bill 10 and a companion Senate bill contain provisions to deal with costs involving obsolete power plants and tax changes that will be necessary under a deregulated system.

But lawmakers rejected an amendment that would have expanded the state Public Service Commission's jurisdiction and protected small businesses attempting to compete with the larger power companies. The PSC had advocated implementing customer choice in phases, with full access in July 2002. A majority of the committee members said the new authority would be unnecessary.

Legislators also noted that the bill and subsequent amendments had become contentious issues, with business groups and out-of-state utilities such as Enron pushing for accelerating competition, and BGE and other utilities working to stave off change. "I've never seen such an adversarial situation as this," Bromwell said. "I want to see a holding company bill pass, but I don't want to put customers at a disadvantage. We're trying to put as many safeguards in as we can for both sides."

The bill travels to the full Senate for approval. Because amendments were tacked on after the bill left the House of Delegates, that chamber also must bless the legislation before it could become law.

Pub Date: 3/28/98

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