Campaign sparks fly over BGE

April 13, 2006|By ANDREW A. GREEN | ANDREW A. GREEN,SUN REPORTER

The legislature's failure to soften BGE rate increases has moved the issue front-and-center in the governor's race, with the Republican incumbent intent on a convincing show of leadership before the November election and his Democratic opponents eager to score points with an angry electorate.

Gov. Robert L. Ehrlich Jr. said yesterday that he's "working almost literally around the clock" to find a way to reduce the coming 72 percent rate increase for BGE's residential customers without calling the legislature into a special session.

Dominating the spotlight with legislators back in their districts, the Republican governor vowed to do what the delegates and senators couldn't during the just-ended legislative session - display the management and problem-solving abilities on which his case for re-election will rest.

"People understand 72 percent," he said. "The instruction to me from the people is to lead, get it done ... get the best deal possible."

His prospective opponents have spent the hours since the deal's collapse accusing him of failing to lead on an issue that will affect 1.2 million BGE customers in Central Maryland.

Montgomery County Executive Douglas M. Duncan, who is running in the Democratic primary for governor, said Ehrlich has failed to look beyond the immediate crisis to develop a comprehensive energy policy, which Duncan said would have to include re-regulation of the electric industry.

"We didn't have the right leadership," Duncan said. "Ehrlich was asking the wrong question. The question he was asking was how can we reduce the 72 percent rate increase, as opposed to why do we have 72 percent?"

Mayor Martin O'Malley, the other Democrat seeking to unseat Ehrlich, said the governor has shown no leadership on the rate increase, siding with the utility company against the people.

"What we elect leaders to do is to look ahead and to steer a course that protects all of us from these sorts of things," O'Malley said. "I directly blame him. No goals. No leadership. An awful manager and someone who sides time and again, like George Bush, with big energy company profits."

Ehrlich was quick to dismiss the mayor's criticism.

"Dogs bark, cows moo, O'Malley whines," Ehrlich said, noting that it was during O'Malley's watch that the city government signed on to the electricity deregulation plan, which has resulted in the rate shock.

The increase, due to take effect in July, coincides with the attempt of Constellation Energy - BGE's corporate parent - to merge with FPL Group Inc. of Florida, a move Ehrlich says will be good for the people but which many Democrats question.

Constellation spokesman Robert L. Gould said yesterday that the company continues to meet with the administration but that there have been no developments since the legislature left.

Ehrlich said he is trying to use a plan developed during the legislative session that would reduce the rate increase on July 1 to 15 percent as a framework for negotiations with the utility. More increases would be spread out over a three-year period.

The company would have borrowed money to make up for the deferred rates and would have covered the interest charges. In all, Constellation offered $600 million for rate reduction.

But Ehrlich and others involved in the negotiations said yesterday that it is unclear whether a deal could be structured the same way without the legislature's approval - or whether Constellation would be so generous without the threat of legislation to disrupt the merger.

Annapolis watchers say it is hard to remember an issue with such strong pocketbook impact. And this one arises just as the state's first Republican governor in a generation faces two strong opponents in a race expected to be decided in the heart of BGE's service area - the suburbs around Baltimore City.

James Gimpel, a professor of political science at the University of Maryland, College Park, said this is an issue that even people who don't pay attention to politics will follow, and it provides a great opportunity for Ehrlich. But if he fails, the governor will have a hard time blaming it all on the legislature, Gimpel said.

"It's incumbents rather than one party or another that wind up being punished when ... people judge themselves to be adversely impacted by an economic issue," Gimpel said. "It's a kind of throw-the-rascals-out reaction that could fall equally on the heads of the incumbent governor and the incumbent legislature."

Ehrlich appeared confident yesterday in his chances to handle the issue on his own. He predicted that BGE rates won't be a dominant issue in this election if he can come up with what the people see as "a fair and logical solution."

In many respects, the General Assembly took the lead in combating the BGE rate increases, with members from both parties taking much stronger pro-consumer stances than the governor, who proclaimed himself a "neutral arbiter."

But Ehrlich has always relished the chance to dominate the state's political landscape and knew that would happen when the session turned the capital into a virtual ghost town.

"I'm the only game in town," Ehrlich said.

andy.green@baltsun.com

Sun reporter John Fritze contributed to this article.

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