Buck stops at PSC

April 25, 2006

Unless General Assembly leaders resolve their differences - and call a special legislative session - the next and last stop for the twinned issues of electricity rate relief and the proposed merger of Constellation Energy Group with Florida's FPL Group is Maryland's Public Service Commission, which must review both plans.

Consumer advocates don't expect much from the commission, with four of five members having been appointed by Constellation's best friend in Annapolis, Gov. Robert L. Ehrlich Jr. The panel is so industry-friendly that just the legislative threat to replace PSC members caused Constellation to offer more rate relief than the governor was able to negotiate without that.

But if it were to act as a true utility watchdog, what could the PSC yet do? For starters:

Make Constellation clarify on the record that it acknowledges the PSC's right of approval of the merger. Rob Gould, the firm's spokesman, says it has waived the right to contest the PSC's right of approval, but an earlier company filing that challenges it has not been changed.

Slow down the PSC's merger review. Just Friday, PSC staff recommended shortening the hearing and legal-briefs schedule by a month. The PSC ought to take more, not less, time to review the merger - unless Constellation's schedule is determining the PSC's.

Reopen the issue of stranded costs to provide more rate relief than the governor's modest deal with the company. This is the $528 million that BGE customers paid Constellation to take over the utility's power plants in the 1999 deregulation settlement, plants that turn out to be much more valuable. Constellation says that only about $200 million came from residential customers, but even that sum would significantly improve the governor's rate relief plan.

Insist that stringent "ring-fencing" measures are in place before any merger approval. Last year, PSC staff issued a thorough report on such measures - which would protect BGE's resources, financial health and rates from the riskier ventures of its parent, Constellation. But at the time, the PSC staff only recommended annual reports on whether more ring-fencing is needed - much like saying: Let's see if any cows leave the pasture and then we'll get around to talking about putting up more fences.

We don't have much hope the PSC will pursue this agenda - but we'd like to be surprised. This page earlier called for the resignation of PSC Chairman Kenneth D. Schisler based on revelations about his cozy e-mail exchanges with an industry lobbyist. And when the legislature recently threatened to can him and other PSC commissioners, Mr. Schisler went to court himself. His and his colleagues' jobs apparently are no longer in jeopardy this year. Now is the time, however, for Mr. Schisler and company to show with their actions why they should still hold their critical posts.

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