Where were they when the lights got expensive?

March 12, 2006|By DAN RODRICKS

Just in case you weren't paying attention - and, with the subject being energy deregulation, that's understandable - here's a reminder of how things came to be. In light of what Maryland consumers face six years after deregulation - a 72 percent increase in electric bills when so-called rate caps end in July - I thought it would be instructive and amusing (in a demented sort of way) to go back and click through this newspaper's extensive coverage of the landmark legislation of 1999. There are some choice quotes and factoids in the morgue.

Let's start with the man on top at the time. Parris Glendening was the Democratic governor of Maryland in 1999, but he was only a bit player in what turned out to be one of the most important legislative actions of the last decade. You can look it up.

Accounts in The Sun archive characterize Glendening as a day late and a dollar short when the bill to open the Maryland electricity market to competition came to final passage in the Democratic-controlled General Assembly. The governor had objections to the legislation, but apparently by the time he raised them it was too late. Everything had been hammered out among legislators and lobbyists. So, ultimately, The Goob really wasn't much of a player at all, to the dismay of consumer advocates.

Of course, just a couple of months earlier, BGE, the company that stood to gain the most from deregulation, had been asked to give $30,000 toward Glendening's second inaugural ball at the Baltimore Convention Center.

Not that there's anything wrong with that! (It was perfectly legal under state law.)

And not that anyone in public life objected, besides the usual Common Cause types and one Republican from Howard County, Robert Flanagan, who told The Sun: "When you go to somebody and ask them for $30,000, they're going to ask for something in return. That kind of demand for money far exceeds the rule of reasonableness." BGE ended up giving $20,000 instead of $30,000; it was a "Diamond Sponsor" instead of a "VIP Sponsor" of the ball.

A few months later, the governor flew low and slow on deregulation. BGE got what it wanted.

"I think the governor, for the benefit of the people, should have weighed in earlier and heavier," Del. James Hubbard, a Prince George's Democrat, told a Sun reporter. "It's always nice to play the game from the stands. But in this case, he should have been on the field."

Meanwhile, in votes by wide, veto-proof margins, senators and delegates swallowed the industry argument for deregulation - free-market competition and lower prices for BGE customers! - with nary a wince nor frown.

Some elected officials and vigilant citizens raised questions, of course. ("Our [constituents] are going to pay for it long after many of us are gone from this institution," said Del. Leon G. Billings, a Montgomery County Democrat.)

But, for the most part, deregulation sailed through the legislature on the hot air of free-market-trumps-all. "We have to keep on the cutting edge of attracting business, and of keeping our utilities here," said Sen. Thomas L. Bromwell, who was then chairman of the Senate Finance Committee and who is now under federal indictment for racketeering and extortion. "We're not leaping ahead of neighboring states that seem more business-friendly than we are."

"If we don't pass [deregulation] this session, we're going to be putting Maryland in an inferior position regarding our business climate," said former House Speaker Casper R. Taylor Jr.

A lot of people, including editorial writers for this newspaper, accepted that argument - that the state had to go along with what BGE wanted or risk losing BGE to rinky-dink Delaware.

As the bill came up for a vote, BGE paid more than $100,000 for a four-page ad in The Sun. It spent more than $1 million on lobbyists and a campaign for public support, according to records analyzed by our reporters.

The House and Senate were easily persuaded.

The votes were 99-36 in the House, 37-9 in the Senate.

But, according to a Sun report in April 1999, few of those who supported the complex bill took time to read it. They deferred to legislative committees, as is custom. Most didn't seem to grasp the long-term importance of deregulation.

"I'm afraid we don't know everything that's in [the bill]," said Del. Joseph F. Vallario Jr. "We hope and pray and think that they have done what is in the best interests of the people of the state of Maryland."

"It's a leap of faith," said Del. John A. Giannetti Jr., a Prince George's Democrat.

Hope and pray?

Leap of faith?

I thought Democrats believed in separation of church and state.

I also thought they believed in regulation of certain industries and what Franklin Roosevelt called "eternal vigilance" against corruption, greed and other threats to the common good. It doesn't appear that the Democratic governor or Democratic-controlled General Assembly knew what they were getting us into when BGE asked for an open market for electricity. Six years later, we have the state GOP blaming the looming rate increase on "the Maryland Democratic Party's monopoly on government in 1999," and, ironically, at least one Maryland Republican has called for the re-regulation of electricity.

I doubt things would have been different had a Republican governor and majority-Republican legislature been in charge in 1999. But you know what? They weren't. So it's a moot point. This one's on the Dems. You can look it up.

dan.rodricks@baltsun.com

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