Power politics in play

Bills rushed to passage to force negotiation on electricity increase

General Assembly


By the end of the week, Gov. Robert L. Ehrlich Jr.'s desk will likely be covered with bills to agitate Constellation Energy Group executives enough to force their hand.

The General Assembly is rushing to pass legislation that would require Constellation to give back $528 million to Baltimore Gas and Electric Co. customers and cap their electric rates until the refund is paid.

Other bills would fire the members of the embattled Public Service Commission, appoint a special counsel to investigate the utility's planned merger with FPL Group of Florida and give the General Assembly veto power over the $11.4 billion deal.

Leaders in the House and Senate said they don't necessarily expect all those provisions to go into law. They would prefer that Constellation offer a more generous plan for lowering BGE electric rates that are scheduled to rise 72 percent this summer.

But passing the bills by tomorrow night would apply maximum pressure on Constellation to roll back the price increases, setting up a high-stakes game of chicken for lawmakers' final day in Annapolis.

If Ehrlich vetoes the bills - and he has indicated that he believes the Assembly is posturing and that the proposed laws aren't needed - legislators would have enough time to override the governor's decisions before adjourning at midnight April 10.

The timing is important. The governor does not have to act on bills passed after Friday until lawmakers leave town for the year, making overrides highly unlikely.

"Unless they come to the table, caps are going to be back in place, this merger is going to be in jeopardy, and we're going to make the stranded costs come back," Senate President Thomas V. Mike Miller said, referring to the $528 million. "Bottom line, if they want this merger to go through, they have to come to the table with more."

But if Constellation comes back in the next week with an aid package that legislators like, they can let Ehrlich's vetoes stand.

"In the best interests of the citizens of Maryland, we want to make sure come April 10 at midnight, we have the appropriate plans in place," said Del. Dereck E. Davis, the chairman of the House Economic Matters Committee. "What's important is not how many bills get passed. That's just to preserve our options in case the rate negotiations fail."

Just how thoroughly the skids are greased for this legislation is evident in the speed with which a House bill to give legislators veto power in the merger has moved through the Senate.

On Monday, Miller said he was skeptical that the bill would cause too much harm to BGE. Yesterday morning, Miller said he worried it didn't go far enough.

Yesterday afternoon, it got a hearing in the Senate Finance Committee. Within 10 minutes after Davis sat down to give a short introduction to the bill, the committee unanimously approved it. Three hours later, it was on the floor of the Senate.

Sen. J. Lowell Stoltzfus, the Republican leader from the Eastern Shore, tried to slow things down, but to no avail.

"Mr. President, I think it's a railroad," Stoltzfus said to Miller during a debate on the Senate floor.

"It is, it is," Miller responded.

The bill is scheduled for final passage this morning. House Speaker Michael E. Busch, who met with Miller yesterday morning to talk strategy, said the Senate's bills - including the plan to refund money paid by customers as compensation for a devaluation of power plants that actually rose in value; and the replacement of the Public Service Commission with legislative appointees - will get similar treatment in his chamber.

Implicit in this strategy is a distrust of Ehrlich's ability to handle the issue on his own. The governor has said that if the legislature goes home with no deal to lower rates, he'll take the reins and work out a solution for BGE customers in conjunction with the Public Service Commission, four of whose five members he appointed.

"I think the PSC, or what's left of it after Mike Miller does his thing, can do it," Ehrlich said yesterday. "So do you need a legislative fix necessarily? No. Is that the direction I see the General Assembly heading? Yes. So to that extent we have been leading the discussions and bringing people together."

Ehrlich's communications director, Paul Schurick called the legislature's strategy "juvenile" and said the governor "will veto what needs to be vetoed."

"They're stupid PR gimmicks," he said of the bills.

But the Democrats who control the legislature - as well as some members of Ehrlich's party - have complained that the pro-business governor has gone too far in putting industry-friendly regulators on the Public Service Commission and not gone far enough in standing up for ratepayers during the recent crisis, making legislation necessary.

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