Electricity competition is pushed

Miller and Taylor urge swift deregulation

Marathon hearing

Marylanders could face area's highest rates, Senate president says

General Assembly

February 26, 1999|By Gady A. Epstein | Gady A. Epstein,SUN STAFF

The leaders of Maryland's House and Senate urged key legislators yesterday to move ahead quickly with deregulation of electric power or risk losing businesses and jobs to neighboring states that are already doing so.

Sensing that many legislators are not convinced of the need to tackle the complex issue now, Senate President Thomas V. Mike Miller and House Speaker Casper R. Taylor Jr. argued that Maryland must catch up with Virginia, Delaware, Pennsylvania and other states already on the cusp of electricity competition.

"Maryland is quickly becoming an island in between states that are moving forward on electric deregulation," said Miller, who along with Taylor has filed deregulation legislation.

"If we do not [act] in a short period of time, Maryland will have the highest rates in the region."

Seated behind Miller and Taylor were more than 150 supportive lobbyists and officials with utilities, manufacturers, retailers and other businesses, many of whom helped write the two leaders' bills.

Toward the back of the packed hearing room were a few consumer and environmental advocates, who came to testify against the leadership's proposals on the grounds that they will lead to increased pollution and higher rates for residential consumers.

The marathon deregulation hearing, held jointly by the Senate Finance and House Environmental Matters committees, came at a point when the issue appears to be on shaky ground in the General Assembly.

Although there is a growing sense that electricity competition is an inevitability in Maryland, some legislators and Gov. Parris N. Glendening seem prepared to take another year, if necessary, to hammer out the details.

"My chief interest is to make sure that Maryland does restructuring right the first time," Glendening wrote in a letter delivered to the two committee chairmen in advance of the hearing. "Once the genie is out of the bottle, it is impossible to put it back in."

Two approaches to electricity competition are being considered by the Assembly.

One was crafted by Taylor, Miller, regulators and a consortium of powerful utilities and businesses.

The other was written by two Montgomery County Democrats, Sen. Brian E. Frosh and Del. Leon G. Billings, and consumer and environmental advocates.

Each would allow customers to choose their power provider and would cap or freeze residential electric rates for the first three or four years of competition. Big businesses likely would benefit first under either plan, negotiating better electricity prices to save millions.

But the Taylor-Miller model leaves many important decisions up to state regulators, a provision that worries environmental and consumer advocates, who fear residents will get stuck with higher rates and power companies will have little reason to control pollution.

Glendening reiterated in his letter that he shares many of these concerns.

He also asked legislators to consider mandating a temporary rate cut, an idea Taylor and Miller oppose.

Others yesterday pushed for legislators to add in consumer protections.

"If consumers cannot realize savings, for the average person it's hard to know what the purpose of this process is," said Dan Pontius of Maryland Public Interest Research Group.

In contrast to the parade of businesses that asked the committees to pass deregulation sooner than later, Pontius, Frosh and others asked legislators not to rush matters.

"We do believe that, done carefully, we can fashion competition that benefits consumers, that benefits the environment," Pontius said.

Baltimore Urban League President Roger I. Lyons said he was worried that the Taylor-Miller model may not have an adequate safety net for poor and rural customers, a concern shared by some legislators.

Utilities and businesses argued that consumers and the environment will benefit from competition, suggesting that power companies may lower prices to win customers and build new power plants that meet modern environmental standards.

Pub Date: 2/26/99

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