Governor, leaders of Senate, House pledge bill to help BGE Measure would permit holding company with no deregulation link

June 19, 1998|By Michael Dresser | Michael Dresser,SUN STAFF

Maryland's three most powerful state government officials made a public commitment yesterday to give Baltimore Gas and Electric Co. next year what they couldn't deliver this year: a bill letting it form a holding company.

Gov. Parris N. Glendening, Senate President Thomas V. Mike Miller and Speaker of the House Casper R. Taylor Jr. issued a joint statement promising to keep the holding-company matter separate from the volatile question of utility deregulation.

It was that linkage that led to the failure of a bill that would have given BGE that freedom on the final night of this year's legislative session. The defeat prompted BGE to put state officials on notice that the company would consider switching its incorporation from Maryland to Delaware or another state that allows utilities to form holding companies.

The three officials, all Democrats, moved yesterday to prevent the political embarrassment such a move could have caused.

"It is our joint intention to sponsor emergency legislation in the 1999 session to amend the holding company law, and we will ask the General Assembly to consider this legislation at the very beginning of the session so that it can be approved and signed into law by the governor as quickly as possible," the statement said.

BGE, which employs about 9,000 in Maryland, expressed its satisfaction with the statement.

"We look forward to continuing our 182-year-old commitment to the state of Maryland and the communities we serve," Chief Executive Officer Christian H. Poindexter said in a statement.

BGE officials pointed out that as a result of a 1910 law, Maryland is the only state that forbids utilities it charters to form holding companies.

Ronald S. Tanner, a utilities industry analyst at Legg Mason Wood Walker in Baltimore, called the statement "great news."

"They made a mistake not passing it the first time around," he said. "BGE is a good corporate citizen. This sort of saves face for the state, too. BGE's going to set up a holding company even if it can't do it in Maryland."

Bob Fleishman, BGE's general counsel, said that a holding company would allow the utility to compete in an electric industry that is rapidly moving from a monopoly model to a competitive marketplace.

"This would give us the flexibility to raise equity and capital, not just for utility purposes, but for our unregulated activities," he said.

Shares in BGE closed at $31.6875 yesterday, up 18.75 cents.

The agreement to separate the holding company and deregulation issues represents a concession by Miller, who insisted on the linkage during this year's session. The bill failed after the Senate added amendments opposed by utilities to the straightforward holding-company bill passed by the House.

The accord could defuse an issue that was giving Glendening's critics a target during his re-election campaign.

Glendening had been criticized by his estranged former economic development chief, James T. Brady, for failing to push the holding-company legislation strongly during the session.

Since then, however, the administration has played the role of conciliator between the company and Miller -- a powerful political ally whom the governor prefers not to confront publicly.

Miller said a visit from Joseph C. Bryce, Glendening's chief legislative aide and a former aide to the Senate president, helped persuade him to call Poindexter to discuss their differences.

According to Miller, the two reached an agreement in a face-to-face meeting two weeks ago but that it took longer to work out the wording of the statement.

The Prince George's County lawmaker said he did not receive any specific commitments from BGE but had satisfied himself that the company would act in good faith when the General Assembly takes up the deregulation issue next year.

"We wanted to keep them here and we wanted to keep them happy," Miller said.

Pub Date: 6/19/98

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