$600 million gamble in Annapolis could prove costly

April 16, 2006|By C. FRASER SMITH

Just before midnight on the last day of the General Assembly session, there was $600 million on the table in relief for electric power customers.

And then there was none, not a penny.

When the celebratory confetti fell, signaling the end of the annual 90-day session, the $600 million deal brokered by Gov. Robert L. Ehrlich Jr. and House Speaker Michael E. Busch was gone.

Here was a whole new version of snatching defeat from the jaws of victory.

From nothing at all - or relative nothing - the governor and the Assembly had persuaded the utility giants to pony up $600 million to ease the trauma of consumers facing a 72 percent increase in their utility bills.

The Assembly put pressure on the utilities by threatening to block a lucrative merger between Constellation Energy Group and a Florida company. It worked. The negotiations yielded hundreds of millions in concessions. The House of Delegates voted 129-8 to approve the deal.

But the Senate balked. Senate President Thomas V. Mike Miller, famous for getting whatever he wants, watched the deal die.

"Miller took it all down," said Speaker Busch, placing blame for the failure on the shoulders of his Democratic colleague.

What was the canny Mr. Miller up to?

There are, of course, theories.

Theory One: Mr. Miller may have hoped to hand a very hot potato to the governor. Without the leverage the Assembly had created, Mr. Ehrlich could be at some disadvantage in negotiations with the energy men.

What incentive will they have now to put the $600 million back on the table? If he fails, he goes into this year's election campaign with that failure stenciled on his first-term rM-isumM-i.

Theory Two: Mr. Miller had not been able to get his slot machine bill passed, watching it die three times in the House. This was a spiteful, $600 million payback, according to this theory.

Theory Three: His members didn't think the deal was good enough. They didn't want to make another big mistake like the one they made in 1999 when the utilities were deregulated. The Sun's Jay Hancock, an expert in matters of finance, thought the deal was only worth about $200 million, or about $300 per consumer - which was not there before the bargaining and was worth taking.

So, $600 million - give or take - was on the table with little or no prospect for doing better when the Assembly had departed Annapolis.

The $600 million was there because lawmakers had convinced the energy guys that they would block the big merger and install new commissioners at the Public Service Commission. Bills to accomplish those things are dead and gone now, along with the $600 million.

"There comes a time," Speaker Busch said, "when you have to take the deal."

There may be some relief for the ratepayers, but will it reach the same level? How will the governor explain the shortfall, if there is one?

He can and surely will say he had brokered a good deal and Mr. Miller gave it away. Mike Miller, Democrat, obstructed the best interests of Marylanders.

What now?

When the session ended, there was talk of a special session with delegates and senators reconvening to take another run at the problem. It might be in the governor's interests to call the Assembly back. If the deal with Constellation falls short of the $600 million, he could involve the Assembly in the blame.

What a shame, said Speaker Busch.

The Assembly had accomplished many progressive things this year: a $15 million-a-year stem cell research bill, improvements in teacher pensions, an important air-pollution control bill. And it had shown some skill in high-level bargaining with skilled corporate leaders.

Oh, and one other thing.

After four years of opposing each other - mostly over the issue of slot machine gambling - Mr. Busch and Mr. Ehrlich found themselves working in tandem. The governor was not threatening the merger or agreeing to reconstitute the Public Service Commission, but he knew something had to be done for the guy on Main Street.

"When it got time to make a deal, we were on the same page. There was haggling and raggling, but when it came to crunch time, we were there," the speaker said.

Senator Miller was not.

C. Fraser Smith is senior news analyst for WYPR-FM. His column appears Sundays. His e-mail is fsmith@wypr.org.

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