PSC head, lobbyist shared strategy

Schisler, industry advocate exchanged e-mails last year

March 18, 2006|By DAVID NITKIN AND KELLY BREWINGTON | DAVID NITKIN AND KELLY BREWINGTON,SUN REPORTERS

The chairman of the Maryland Public Service Commission regularly consulted with a utility industry lobbyist on how to keep an electricity deregulation plan on track in the face of a huge rate increase, e-mails obtained yesterday by The Sun show.

The messages from February 2005 show how lobbyist Carville B. Collins and Public Service Commission Chairman Kenneth D. Schisler shared sensitive strategy and discussed personnel decisions within the agency. The messages raise questions about the independence of an agency charged with regulating prices set by power companies.

Revelation of the e-mail exchange comes as the Public Service Commission's handling of a looming 72 percent electricity rate increase has drawn the ire of lawmakers and customers of Baltimore Gas and Electric Co., who say the agency has not done enough to forestall the increase.

The messages - in which Schisler spoke of the "lobotomy" that critics had accused him of performing at the agency, and Collins quoted energy executives as marveling at the changes Schisler had wrought in just his first two years as chairman - were described as a "smoking gun" by Senate President Thomas V. Mike Miller.

In an interview, Schisler called Collins an acquaintance of 15 years and said the exchange did not indicate any partiality. Collins could not be reached for comment.

"There is nothing in this e-mail that illustrates that I have taken a side of anyone on anything," he said. "There is nothing in this e-mail that suggests any kind of impropriety."

Lunch with Ehrlich

An attorney with DLA Piper Rudnick Gray Cary, Collins represents Pepco Holdings Inc., Columbia Gas of Maryland, Allegheny Energy and several other utility clients. He was the chief attorney for Gov. Robert L. Ehrlich Jr.'s transition team. Schisler is a former Republican delegate appointed by Ehrlich to head the regulatory agency.

In an exchange Feb. 7 last year, the lobbyist told Schisler that he is "having lunch at the mansion today with the governor at 1 p.m." and asks, "Anything you want me to mention to him?"

Schisler replied that he would be seeking the lobbyist's assistance in countering questions from Miller, who at the time had put together a task force to study the deregulation issue in time for the lifting of caps on rates this summer:

"Tell him [Ehrlich] that I ... will work with you to anticipate and preempt Miller trying to make a political football of this in 06. I have some ideas. My thought is to prepare responses and can them to see if we need them."

In the same message, Schisler addressed the replacement of long-serving staffers at the commission with former utility industry employees, a move that has drawn harsh criticism in recent days as the furor over this summer's planned rate increase grows.

"I am putting data together for our budget hearings in the event someone goes after me on the `lobotomy' I performed on the agency," Schisler wrote. "I think we have a record to stand on and if they go after me I can defend [it].

It is not uncommon, Schisler said, for the commission chairman to interact with advocates from many sides of the utility industry, including Collins. Schisler said he frequently spoke with members of the regulatory bar, which consists of attorneys representing utility companies, electricity suppliers, consumer advocates and environmental interests.

"Do I know people on all sides of the issues in the regulatory bar? Of course I do. Have I worked with consumer advocates and company officials to work on solving problems? Yes," he said.

Schisler said the "lobotomy" reference was "shorthand to a reckless quote" made earlier by Sen. Brian E. Frosh, a Montgomery County Democrat who had been critical of staff turnover at the commission.

"I found it was insulting to our employees that he would say such a thing," Schisler said. "That wasn't me saying I had employed a lobotomy but rather a cynical reference."

`It's improper'

Leading Democrats in the General Assembly called the exchange highly inappropriate and said it offered the clearest evidence to date of what they said were unacceptable Ehrlich administration ties between regulators and the businesses they oversee.

"It's really the smoking gun in terms of tying this administration being in bed with the utility companies," said Miller, the Senate president. "It causes a complete loss of confidence in anything that members of the Public Service Commission say and do at this point in time. ... It's improper, uncalled for and totally unwarranted."

House Speaker Michael E. Busch said the e-mails bolster his notion that the commission and the state's consumer advocacy group - the Maryland Office of the People's Counsel - have become an extension of the Ehrlich administration and its pro-business leanings.

"It reinforces the belief that this legislature and [the] general public is starting to have, that the independence of the Public Service Commission and the Maryland Office of the People's Counsel has been completely compromised," he said.

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