Assembly OKs bill to strengthen BGE

Utility would form unregulated holding company to compete

February 03, 1999|By Timothy B. Wheeler | Timothy B. Wheeler,SUN STAFF

In a show of support for Maryland's business community, the General Assembly gave final approval yesterday to a bill helping Baltimore Gas and Electric Co. keep up in the increasingly competitive power industry.

With only one dissenting vote, the House and Senate sent emergency legislation to the governor's desk that will allow the Baltimore-based utility to form an unregulated holding company.

Gov. Parris N. Glendening promised to sign the holding company bill today, making it the first legislation to become law less than three weeks into the 1999 session.

The governor praised legislative leaders for their quick action on the bill, which had been widely viewed by corporate leaders as a litmus test for the Assembly on its attitude toward business.

"This new law makes BGE more competitive, and it makes Maryland stronger," the governor said.

Christian H. Poindexter, BGE's chairman, president and chief executive officer, issued a statement thanking Glendening and legislators. "Working in the best interests of the state, the governor and lawmakers passed a bill that better positions a home-grown company for greater competition," he said.

The holding company legislation died last year after it got caught in political wrangling over deregulating electric power in the state. BGE, the only utility in Maryland barred by law from having a holding company, then took steps to move its corporate charter to neighboring Delaware, which allows the shell corporations. Glendening and legislative leaders responded in the summer by vowing to pass the bill this session.

"I'm glad that it's passed. Baltimore Gas and Electric Company has been a good corporate citizen," said Senate President Thomas V. Mike Miller. The holding company bill passed the Senate 47-0.

"This is the first sign of the Maryland General Assembly to let business know we are friendly to business in this state," said Sen. Thomas L. Bromwell, chairman of the Finance Committee, which handled the measure.

The lone dissenter in the House, which approved the bill 129-1, was Del. Leon G. Billings. The Montgomery County Democrat said that by passing the bill, the House was giving in to "corporate blackmail" by BGE's Poindexter.

"Somebody has to say he doesn't care if Poindexter moves to Delaware," Billings said. "I'll help him rent the van. It's our responsibility to generate a generally favorable business climate. It is not our responsibility to subsidize businesses which try to blackmail the state using their economic power."

BGE has said it needs a holding company to raise capital and make acquisitions without having to seek regulatory approval. Poindexter told lawmakers during hearings two seeks ago that a holding company would help the utility buy and sell electricity in the wholesale power market.

"It's just a matter of staying in business," he said after the hearings, defending the company's pressure for the legislation.

A BGE subsidiary bought and sold 116 million megawatt-hours of power last year, more than three times what it generated at its own power plants. But the company was hampered in seeking to expand that effort because it could not raise capital without seeking approval from the state's Public Service Commission. The holding company would not be so regulated.

BGE still must get approval from federal energy regulators to set up a holding company. The utility intends to seek a go-ahead from its shareholders this spring.

Sun staff writers Michael Dresser and Thomas W. Waldron contributed to this article.

Pub Date: 2/03/99

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