Assembly OKs bill to choose power

Governor promises he'll sign sweeping deregulation measure

April 03, 1999|By TIMOTHY B. WHEELER | TIMOTHY B. WHEELER,SUN STAFF

Legislation that will let Marylanders choose their power company cleared the General Assembly yesterday, and Gov. Parris N. Glendening promptly declared he would sign it despite qualms about its consumer and environmental protections.

The governor ended speculation that he might veto the legislation just a few hours after it won overwhelming final approval from the House of Delegates and Senate.

Glendening said that while he wished it had offered deeper rate cuts to residential customers and more safeguards for the state's air quality, "this bill is too important for Maryland's future to hold up further."

The governor's announcement concluded weeks of intensive lobbying and contentious legislative maneuvering on a complex, sweeping measure that will affect the pocketbooks of nearly all of Maryland's 5 million residents -- and perhaps the quality of the state's environment as well.

"This is the toughest issue that I have seen in 21 years," said

Sen. Thomas L. Bromwell, a Baltimore County Democrat who as chairman of the Finance Committee helped to craft the legislation.

With yesterday's action, Maryland is poised to join 18 other states -- including Delaware, Pennsylvania and Virginia -- in moving to open its electric power industry to competition.

The legislation -- approved 95-34 by the House and 34-13 by the Senate -- lays out the ground rules by which companies other than utilities can vie to sell electricity to business and residential customers.

Homeowners and renters can begin shopping for cheaper power starting July 1, 2000, while businesses will be free to choose their suppliers as of Jan. 1, 2001.

Lawmakers also approved a bill cutting utilities' property taxes in half to help them compete with out-of-state electricity suppliers. The measure provides grants to counties to cushion their revenue losses.

State business leaders contend that to compete, they need the lower electric rates that deregulation is expected to bring them, and they had warned that Maryland's economic vitality and jobs were at stake.

"If we had not gotten deregulation this year, then Maryland industry would have been looking at greener pastures elsewhere," said Michael Powell, lawyer for 24 of Baltimore Gas and Electric Co.'s largest industrial customers.

Consumer and environmental advocates had urged the governor to reject the deregulation measure, calling it a sweetheart deal for business and utility interests.

They worry that residential users will wind up with little choice and no savings if suppliers reserve their best deals for large business customers. They also say that the search for cheaper power could lead to increased air pollution, as more electricity is generated by dirty coal-fired plants upwind of Maryland.

"The more people get a chance to look at this bill, the more they'll realize how bad it is," said Dan Pontious, executive director of the Maryland Public Interest Research Group. "For consumers and the environment, this is a terrible bill."

Glendening said he took satisfaction in getting lawmakers to require rate cuts for residential customers who stay with their old utilities, and some minor environmental provisions.

The bill calls for a rate reduction of 3 percent to 7.5 percent for residential customers who stay put, and it establishes a $34 million fund financed by ratepayers to help the poor pay their bills.

The actual size of the rate cut -- and many other details -- are left up to the Public Service Commission. The five-member panel regulates phone and electric service and has been negotiating for more than a year with utilities, businesses and other interests on how to deregulate.

Michael J. Travieso, the state People's Counsel, who represents consumer interests before the PSC, called the Maryland bill one of the worst deals for residential customers of all the states deregulating their electric power industries.

"I think it'll be a long time before there's any competition," he said, and he predicted that residential rates would rise after caps are lifted in four years.

Customers can expect to be bombarded early next year with advertising pitches from companies wanting to sell them power -- and from their utilities, urging them to stay put.

The bill calls for the PSC to mount a $6 million consumer education campaign in the next year alerting the public to the looming deregulation of electricity rates and supply, and offering tips on how to sort through the confusion of competing marketing claims.

Some legislators worried yesterday that even with such help, consumers would be unable to understand or deal with another marketing blitz akin to what they have been facing under deregulated long-distance telephone service.

"I am scared to death about our senior citizens," said Sen. Jennie M. Forehand, a Montgomery County Democrat. "What is in this bill that protects people who know not what they are doing?"

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