Private vote OKs rate plan

PSC cuts interest charge

April 29, 2006|By ANDREW A. GREEN | ANDREW A. GREEN,SUN REPORTER

After voting in private, the Public Service Commission said yesterday that it was approving the electric rate deferral plan negotiated by the governor on behalf of BGE customers with one key change: It lopped off a 5 percent interest charge.

While the decision was announced yesterday, it was ratified by a 4-1 vote during a private session Thursday night. The closed-door meeting - convened just two hours after a contentious public hearing concluded at 6 p.m. - sparked outrage from leading Democrats.

The practical effect of the dropped interest charge will be a cumulative reduction of about $20 on the median amount owed by ratepayers who opt in to the plan, which spreads a 72 percent boost in electric rates over 18 months. BGE has said it expects about half of its 1.1 million customers to do so. The rate increase is due to take effect July 1.

For weeks, Democrats have criticized the commission and its chairman, Kenneth D. Schisler, as being too close to the power industry they are supposed to regulate. Some said the rapid approval, without broader public input, would add strength to the effort to reconvene the legislature in a special session to craft a new rate deferral plan and also revive a bill that would fire the current members of the PSC and reduce the governor's power over it.

"Just when you thought people couldn't make any more mistakes, they go one step further," said House Speaker Michael E. Busch. "This is the continued erosion of public confidence in the PSC. This is why the legislature voted to replace the PSC."

Busch's criticism was significant because he had joined Gov. Robert L. Ehrlich Jr. in continuing talks with officials of Constellation Energy Group - BGE's parent company - after the General Assembly failed to approve a deal as the annual 90-day legislative session expired at midnight April 10.

All four commissioners appointed by Ehrlich supported the deal. The lone dissenter was Harold Williams, a former BGE executive and the only Democratic appointee on the board.

He had expressed concerns during the tense hearing Thursday that the plan did not contain sufficient relief for poor people. Last night, he repeated that criticism, saying he was worried that ratepayers unable to afford higher costs - even on a deferred basis - would seek to heat and light their homes in other ways that could prove dangerous.

"What is this going to do to them?" he asked. "If their electricity is turned off, will they seek other means of providing light? Is the 72 percent worth the life of a person? I would say no, absolutely not."

Williams criticized the speed with which the commission moved to adopt the plan. "I felt within myself that more time should have been allotted for deliberation on such a critical situation for the people of Maryland, but again I'm only one vote," he said.

Schisler, in a statement last night, hailed the plan as offering another option available "to help address rising energy costs."

Shareese N. DeLeaver, an Ehrlich spokeswoman, said the governor was pleased by the commission's approval of the rate plan.

"This approval will not only ensure stability in billing but also access to affordable electricity," she said. "The goal of the administration is, at this point, to educate the consumer about their options and make sure that the ratepayers have the necessary information to make an informed decision for their families."

DeLeaver said criticism from Democrats about the deal was "too little, too late."

Constellation spokesman Robert L. Gould said last night, "At this point, we're studying the decision," declining to comment further.

The commission has the power to approve, deny or modify the rate deferral plan. Any changes the commission demands would be included in its written order.

Former PSC Chairman Catherine I. Riley said the commission appeared to have followed its usual procedure in ruling on the rate deferral plan, though it acted with greater speed than is normal.

She said that on deliberative matters, commission members typically gather to discuss a case after a hearing. There, they take a vote, and a member of the staff writes a draft order for the commissioners to edit and approve.

"On something of the nature that this was, they needed to at least get together and talk about it," she said. "It's not particularly unusual, except you usually don't vote the same day you heard it."

Kevin Enright, a spokesman for Attorney General J. Joseph Curran Jr., said that such deliberations would potentially fall under an exemption in the open meetings law for executive functions of a public body.

Senate President Thomas V. Mike Miller said the commission should have held more hearings and deliberated and voted in public on so important a matter. He said the governor should request that the commission try again with more public input.

"It throws a deeper and darker cloud over the entire proceeding," Miller said.

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