Ehrlich assertion flawed on BGE issue

Records fail to link O'Malley to rate rise

April 14, 2006|By ANDREW A. GREEN | ANDREW A. GREEN,SUN REPORTER

Gov. Robert L. Ehrlich Jr. has repeatedly claimed that Baltimore, under Mayor Martin O'Malley's leadership, signed on in support of Maryland's electricity deregulation plan, but documents indicate the city's participation was nominal and occurred under Mayor Kurt L. Schmoke.

With the state Senate's failure to enact a settlement agreement to mitigate the pending 72 percent rate increase for BGE customers, electricity deregulation figures to be a major issue in the coming governor's race. O'Malley is seeking the Democratic nomination to challenge the Republican governor.

Ehrlich, who was a congressman when Maryland deregulated its electricity industry, has said in a variety of forums in recent weeks that O'Malley signed on in support of a deregulation settlement agreement in 2000, a follow-up to the legislature's 1999 vote to restructure the industry.

"I've tried not to remind you all that he actually intervened in this case," Ehrlich said Wednesday when asked about O'Malley's criticism of his leadership on the rates issue. "Dogs bark, cows moo, O'Malley whines. ... If he stops whining, I will not use his intervention in this case against him. That is my pledge."

Records provided by the governor's office show the settlement agreement was finalized in November 1999, not 2000. O'Malley took office in December 1999. In the agreement, the Baltimore City government is listed under the heading, "Other Opposing Parties."

In support of the governor's contention, his office provided a copy of a brief filed on behalf of the mayor and City Council of Baltimore in the Office of People's Counsel's case before the Public Service Commission challenging BGE's deregulation plan.

The brief raises objections to increased costs for street lighting - estimated at an additional $500,000 a year for the city - but says little about the effect of the deregulation plan on consumers. The city suggests the Public Service Commission adopt the settlement agreement with the exception of the increased charges for street light maintenance, saying it has "many advantageous features for residential customers."

The brief is dated Aug. 30, 1999. O'Malley was elected mayor on Nov. 2, 1999.

The Public Service Commission adopted the settlement agreement on Nov. 10, a month before O'Malley's Dec. 7 inauguration.

O'Malley was a city councilman at the time. But City Solicitor Ralph Tyler said the notation on the brief that it was filed on behalf of "the Mayor and City Council of Baltimore" is a legal formality and does not indicate that the City Council was involved. That designation is the official name of the municipal corporation, as defined in the first sentence of the city charter.

"For all his barking and mooing, the governor sure laid an egg," O'Malley spokesman Steve Kearney said. "Bob Ehrlich is misrepresenting the city's position just like he's misrepresenting ratepayers by letting his 72 percent rate increase stand." Kearney suggested the governor should apologize "for misleading people with false statements."

The Ehrlich administration defended the governor's contention by saying that O'Malley, after being elected mayor, could have challenged the settlement but did not.

"There's not a scrap of paper anywhere of his concerns with respect to the ratepayers," Ehrlich spokesman Henry Fawell said. "The only concerns expressed on behalf of the city were with respect to the streetlights."

But Ehrlich has repeatedly asserted that O'Malley directly intervened in support of the deregulation agreement.

"Actually, didn't he sign off onto that in the year 2000, I believe? Yeah. In any event, you see, I don't want to start pointing fingers," Ehrlich said on WTOP radio on March 17.

On March 25, the governor made a similar assertion on WJZ-TV. "As you know, he was a party to the 2000 agreement," Ehrlich said. "He made himself a party to the agreement."

The gubernatorial politicking on the rates issue comes amid continuing negotiations over the increase but little progress.

Ehrlich Chief of Staff James C. "Chip" DiPaula Jr., the governor's point man in the talks, said the administration continues to work with BGE and its parent company, Constellation Energy, to find a way to reduce the impact of the rate increases on residential customers. The increases would result from the expiration of rate caps instituted as part of Maryland's deregulation plan.

DiPaula said the failure of legislation on the last night of the General Assembly session has forced the administration to try new avenues for rate reduction. He said the governor is willing to call a special session of the legislature but considers that option a last resort, given the divisions in that body over the rates issue.

Ehrlich, legislative leaders and Constellation negotiated a deal early this week that would have limited the rate increase to 15 percent on July 1. A 29 percent increase would have come a year later, followed by another increase to bring customers up to market rates a year after that.

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