Groups focus on PSC issue

Agency decides to delay review of utility merger

April 25, 2006|By ANDREW A. GREEN | ANDREW A. GREEN,SUN REPORTER

Amid public confusion over the deal that Gov. Robert L. Ehrlich Jr. struck to delay BGE rate increases, advocacy groups and the city of Baltimore increased their pressure on the Public Service Commission yesterday to make its review of the plan and of the pending merger of the utility's parent company with a Florida corporation more transparent.

The PSC decided yesterday to delay its review of a proposed merger between Constellation Energy and FPL Group Inc. to give the parties in the case more time to analyze the rate deferral agreement. The move came after a flurry of motions from various interest groups.

The commission has not decided when to hold the hearings, though its staff suggested last week a compressed schedule that would have called for all testimony to be completed by Aug. 11, more than a month earlier than the original plan.

The consumer and organized labor groups who asked for the delay in this week's hearings said they were happy about the commission's decision - so long as it doesn't mean curtailing public comment on the $11 billion merger.

Rates for the electric commodity charge on BGE bills are set to go up 72 percent July 1. Under the deal Ehrlich struck, ratepayers could delay much of the increase this year but would end up paying higher bills through 2009 to make up the difference. Customers would have to sign up for the plan; power company officials estimate that, at most, half of BGE's 1.2 million customers would enroll.

Several groups said they want hearings held during evening hours, so those affected by rate increases can attend.

"Had they been trying to include the people and make the meetings at times when the people would have a say so from the beginning, we wouldn't be where we are now," said Derrick Jessup, head organizer for the Association of Community Organizations for Reform Now, or ACORN, in Baltimore. The group joined the request for the delay in this week's hearings.

In a filing made late yesterday, the International Brotherhood of Electrical Workers, which has been heavily involved in the PSC's hearings, said the commission's staff is proposing "a truncated schedule that prejudices the opportunity of parties to build a full record, and limits the commission's ability to consider one of the most important cases that has ever come before it."

Additionally, the Baltimore government and the IBEW issued requests yesterday for the PSC to turn over documents showing the compensation packages that executives of Constellation Energy will be given if the merger is completed.

The city also filed motions requesting that the merger and the rate increase be considered simultaneously; that the PSC disclose information about a consultant's study of how much BGE could save as a result of the merger; and that a hearing on the rate plan scheduled for Thursday afternoon at the PSC's headquarters be conducted in the evening in a larger room to better accommodate the public.

"The PSC should not attempt to ram the Ehrlich-BGE rate hike plan through on Thursday without disclosing what it knows about executive pay and how much in consumers savings it is leaving on the table," Mayor Martin O'Malley said in a statement.

Constellation spokesman Robert L. Gould declined to comment on the requests for information about the compensation packages but said the company would accept the delay in the merger hearings.

"At the same time, we still remain hopeful for an expedited review," Gould said.

PSC spokeswoman Christine Nizer said the commission hasn't decided whether to accept its staff's recommendation on a schedule for the merger hearings.

Deputy People's Counsel Theresa V. Czarski said the proposed compressed schedule might benefit groups that are scrutinizing the merger because it would give them a few extra weeks to get their testimony in order.

"It gave us a little more time on the front end," she said.

BGE rates are set to increase when caps instituted as part of Maryland's 1999 deregulation plan expire this summer. Similar caps have expired in suburban Washington and on the Eastern Shore.

Those who choose to participate in the delay plan will see an initial 19 percent rate increase in July and another rise in June 2007, when they will also be required to pay a $19 monthly fee. If the merger goes through, bills for all customers, whether they participate in the plan or not, would be reduced by about $4 a month for 10 years.

Legislators, who are contemplating returning for a special session to try for a better deal, said the plan has caused widespread unease and confusion among residents who can't decipher whether opting into the plan is in their best interests.

"It's sort of like Medicare Part D," said state Sen. Paula C. Hollinger, a Baltimore County Democrat, referring to the new federal prescription drug benefit that has been pilloried for being too confusing. "Personally, I'm hoping we go back into session."

andy.green@baltsun.com

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