E-mails show ties of utility, Schisler

PSC chairman says that's part of the job

March 22, 2006|By KELLY BREWINGTON AND DAVID NITKIN | KELLY BREWINGTON AND DAVID NITKIN,SUN REPORTERS

Maryland Public Service Commission Chairman Kenneth D. Schisler discussed with a power company official how to get Republicans into the leadership of a national utility regulators association and how to draft legislation that would boost energy competition in Maryland, a new batch of recently released e-mail shows.

The November 2004 discussion took place when the official, Loyd "Aldie" Warnock, was working for Mirant Corp., an Atlanta-based company that owns three Maryland power plants rated by an environmental watchdog group as among the dirtiest in the nation.

Another group of e-mails dated earlier that year shows that Warnock played host to Schisler and his aides on a Texas hunting trip shortly before he left Houston-based Reliant Energy, where he had worked for decades.

Schisler said in an interview yesterday that his relationship with Warnock and other utility officials was proper. Part of his job is to foster competition among energy providers, he said, and Reliant wants to bring power to Maryland.

In an interview yesterday, Warnock said he respects Schisler and called Maryland's PSC "one of the best commissions in the country."

Critics who have called for Schisler's resignation in recent days said that the latest e-mails provide more evidence of a too-close relationship between regulators and industry at a time when the Public Service Commission has come under fire for not doing enough to protect Maryland consumers from an impending 72 percent increase in Baltimore Gas and Electric Co. rates for electricity.

The PSC "should be a consumer watchdog agency," said Brad Heavner, state director for the Maryland Public Interest Research Group, which works on clean-air issues and other topics that affect utility companies. "I wish I had the dialogue going with these guys and access like that that would allow our viewpoint to be heard.

"You are talking about collusion on national energy policy, on developing state energy policy," Heavner said. "People are asking, `Is there collusion on these rates cases?' You don't want to jump to conclusions, but with a cozy relationship like that, you have to wonder."

Disclosure of the correspondence comes days after The Sun obtained e-mail between Schisler and utility industry lobbyist Carville B. Collins, revealing discussion of commission appointments and political strategy on utility deregulation.

In the e-mail, Schisler and the lobbyist discussed how to address criticism that the chairman had "lobotomized" the agency by replacing high-level staff members. They also discussed how to keep an energy deregulation plan on track despite expected criticism of rising rates.

Collins has not commented on the e-mail, but the disclosure has led one of his clients, Pepco Holdings Inc., to say it would reconsider its relationship with the lobbyist.

Electric rates charged by BGE are scheduled to rise an average of $743 per family when temporary rate caps expire in July. The caps were imposed as an interim consumer protection measure during a transition to a deregulated energy market. Lawmakers who passed a deregulation bill in 1999 expected prices to drop, but they have risen instead.

Gov. Robert L. Ehrlich Jr. and lawmakers are working on plans to reduce the rate increase.

Schisler, who defended his relationship with Collins as part of interactions with people from all sides of utility issues, said yesterday that a 2004 trip to Houston and his dealings with Warnock represent efforts to encourage retail utility competition in Maryland.

"The law requires the PSC to attract competitors to come to the market," he said. "Did I reach out to companies to try to get them to come to Maryland? Did I interact with them in a social way occasionally? Yes, but I should point out that I never took anything for free from a company."

Schisler noted that his relationship with Warnock, who once represented unregulated utilities, is distinct from how he interacts with utility companies in Maryland jurisdictions, which the commission is charged with overseeing.

"There is not a cozy relationship with the regulated companies that way," he said. "There is appropriate interaction. But I certainly would never discuss a pending matter with a regulated company."

But Warnock has been working for regulated companies since June 2004, when he joined Mirant as a senior vice president for regulatory and external affairs. Two Mirant plants in Maryland are among the 20 worst for sulfur dioxide pollution, and a third ranks fourth-worst in the country for nitrogen air pollution, according to the Washington-based Environmental Integrity Project.

Warnock resigned from Mirant in November 2005 and joined Allegheny Energy Inc. in January as vice president for external affairs. Collins is a registered lobbyist for Allegheny. But Warnock has not registered as a lobbyist in Maryland since at least 2004, state records show.

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