Senator calls on PSC head to resign

Frosh says 2005 exchange between Schisler, lobbyist is an `egregious violation'

March 19, 2006|By DAVID NITKIN | DAVID NITKIN,SUN REPORTER

A prominent state senator called for the resignation of Public Service Commission Chairman Kenneth D. Schisler yesterday, saying a newly disclosed e-mail exchange between the regulator and a top power industry lobbyist demonstrates "an egregious violation of the public trust."

Sen. Brian E. Frosh, a Montgomery County Democrat, said the e-mails between Schisler and lobbyist Carville B. Collins - reported yesterday in The Sun - show that the commission is failing in its responsibility to serve as a neutral arbiter between consumers and utility companies. Frosh said his outrage was also fueled by firings at the commission in 2004 and a closed-door meeting last week to discuss electricity rate increases that excluded the lone commissioner appointed by a Democrat.

"The chairman of the Public Service Commission is supposed to be calling balls and strikes," Frosh said in an interview, describing how the quasi-judicial agency is designed to remain independent of political pressure and whims. "And you can't be calling balls and strikes when you are plotting strategy with a member of the industry. ... He's not supposed to be playing kissy-face with lobbyists."

Schisler could not be reached for comment yesterday. Last week, Mayor Martin O'Malley, a Democratic candidate for governor, also called on Schisler to resign.

But Gov. Robert L. Ehrlich Jr. said he did not think the 2005 e-mail exchange - in which Schisler discussed with Collins how to defend against criticism that he had "lobotomized" the agency - was noteworthy or relevant. "Where's the story?" he asked on his bimonthly radio show on radio station WBAL.

"Of course I was going to bring in more business-oriented commissioners, and judges and appointees," Ehrlich said. "We ran on a pro-business platform."

Del. Warren E. Miller, a Howard County Republican who sits on a committee that oversees utilities, said the electronic conversations between lobbyist and regulator were appropriate, and he rejected Frosh's call for resignation.

Frosh is asking for a more distant relationship than state law requires, Miller said. "You are regulating an industry. Of course you have a dialogue," Miller said. "It doesn't mean he is in the pocket of the industry."

The e-mail exchange did trouble one of the lobbyist's clients, however. William T. Torgerson, the vice president and general counsel of Pepco Holdings Inc. - a Washington-area utility that uses Collins as a lobbyist - said the firm was reconsidering its relationship with the paid advocate after the disclosure of e-mails that described how Pepco executives had praised Schisler to the governor in a private meeting.

Collins, an attorney with DLA Piper Rudnick Gray Cary in Baltimore, was chief counsel to Ehrlich's transition committee. His other utility clients include Allegheny Energy and Verizon.

The Public Service Commission has come under intense criticism in recent weeks for not doing enough to protect consumers from a looming 72 percent electric rate increase by Baltimore Gas and Electric Co. Pepco rates are also rising but by a lesser amount.

The six-year cap on BGE rates - imposed as part of the deregulation bill passed by the General Assembly in 1999 - is being lifted in July. BGE residential customers are due to pay $743 a year more on average, though both Ehrlich and the Democrats have said they will work to ensure that the full 72 percent increase is not levied immediately.

The e-mails show how Schisler and Collins discussed how to keep the deregulation plan in place despite expected criticism over the rate increases.

While Ehrlich insisted yesterday that the current Public Service Commission is handcuffed by decisions of its predecessors, the immediate past former chairwoman said that's not the case.

Catherine I. Riley, a former Democratic state senator who headed the agency before Schisler, said the commission's failure to act sooner created the current situation.

In a letter to The Sun, Riley described how the deregulation law gave the current commission chances to intervene and lower rates. "The PSC retained its full power and authority under the new law to oversee and reject any bid [for power] it found not to be `just and reasonable,'" Riley wrote.

The current PSC, she wrote, "could have sought to change, rescind, amend, expand or replace" previous commission orders issued when she was chairwoman.

In an interview, Riley said that before leaving her post in 2003, she urged lawmakers and the governor to examine deregulation in the coming years and to work hard to encourage competition. "When I was at the commission, we talked about it and worried about it every day," she said.

Ehrlich also sought yesterday to shift responsibility for the impending rate increase away from his administration and the PSC, and toward legislative leaders who helped pass the bill - notably Senate President Thomas V. Mike Miller, who called the e-mail exchange a "smoking gun."

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