How deal on energy died in last hours

General Assembly


Just two hours remained before one of the Maryland General Assembly's most frenetic finishes, and in the Senate lounge Sen. Thomas M. Middleton was pleading with his exhausted Finance Committee colleagues: Accept a plan to stagger a 72 percent rate increase for more than a million Marylanders or return home with nothing.

But there, in the stifling lounge, the plan began to crumble.

Anxious lawmakers recalled their 1999 vote over deregulation - now a nightmare to many - and worried that they might be about to make a similar mistake.

"We are in trouble now because of what we did then," said Sen. Delores G. Kelley, a Baltimore County Democrat, who has become known for her biting remarks toward Constellation Energy in recent weeks. "I just think this whole thing is ridiculous. We are just going along with what they are telling us. I want to know, how does this put us in a better place than we are now?"

It was the turning point in a day full of back-door brokering with Constellation executives, who offered $600 million over 10 years to blunt the rate increase for Baltimore Gas and Electric customers. Lawmakers would allow the governor to keep the current Public Service Commission for another year and customers would be hit with incremental increases until January 2008, when market-rate prices would kick in. And the plan would allow more low-income ratepayers to qualify for a program that helps them pay for utilities.

But it would have required legislators to effectively endorse the pending merger between Constellation Energy and FPL Group, Inc. of Florida, something many wouldn't accept.

And it would have required them to vote immediately. With the clock ticking inexorably toward midnight, when the session would expire, every minute began to work against the deal.

Twelve hours earlier, the time crunch seemed to be pointing toward a resolution. It is an old tactic in the General Assembly to hold controversial issues to the last day, when mounting pressure gives birth to compromise. That morning, when Constellation executives arrived for a meeting with Gov. Robert L. Ehrlich Jr., Senate President Thomas V. Mike Miller and House Speaker Michael E. Busch in the governor's reception room, ready to put $600 million on the table - four times Constellation's original offer - the strategy looked as if it was working again.

Ehrlich bounded out of the meeting about 8:45 a.m. proclaiming himself "very cautiously optimistic. Extremely cautiously optimistic, if that's grammatically correct."

Busch got a mostly positive reaction when he reported the deal to the Democratic caucus that afternoon in the House office building. "Ultimately, it is what the best deal is for the ratepayers," he said.

But things were different in the Senate, where Miller encountered legislators who had grown more skeptical as the session dragged on.

The morning meeting, said Middleton, was pure mayhem. Critics such as Sen. E.J. Pipkin, an Eastern Shore Republican, and Sen. George W. Della Jr., a Baltimore Democrat, questioned why the legislature appeared to be giving up on overriding Ehrlich's vetoes of bills that would reconstitute the PSC and give the legislature power over the Constellation merger.

"A lot of it came down to the real politics of the thing: How do I sell this?" recalled Middleton, who had a front seat in the negotiations as chairman of the Finance Committee. "We kept going and going, and finally, Mike said, `We're going to go with the bill.' "

By late afternoon, communication had broken down. Miller did not attend a scheduled 4 p.m. meeting, and instead continued to preside over the Senate. At one point, Busch took a seat in the second-floor gallery and watched Miller preside over debate. Miller glanced up and gave him a nod of acknowledgment.

Around then, pessimism - and talk of a possible special legislative session - started to creep through the State House.

"It was my understanding at that point the Senate felt there were no more reasons to continue meeting," recalled Del. Dereck E. Davis, a Prince George's County Democrat who is chairman of the House Economic Matters Committee.

With Senate opposition to the plan growing about 9 p.m., House lawmakers began crafting another version of the bill.

By 10 p.m., when Middleton called his committee meeting in the Senate lounge, dissent was raging. At first Middleton instructed Senate staffers to keep the lounge doors closed. But a few minutes later, they were opened after a handful of reporters objected, saying shutting them out was a violation of the state's open-meetings laws.

Pipkin, a former stockbroker who has emerged as one of the Assembly's leading voices on electricity issues, objected to the plan's being contingent upon the $11.4 billion merger between Constellation and FPL. Pipkin peppered a committee staffer with questions as he marked up pages of the bill with ink.

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