Court muzzles BGE on rates

Judge bars publicizing plan to defer increases, pending city's lawsuit

May 11, 2006|By ANDREW A. GREEN | ANDREW A. GREEN,SUN REPORTER

BGE must halt efforts to tell customers about an electricity rate deferral plan negotiated by Gov. Robert L. Ehrlich Jr., a Baltimore judge ruled yesterday, opening a path for arguments over whether the state should have gotten a better deal for 1.2 million ratepayers facing a 72 percent increase this summer.

"It makes little sense ... to have the parties continue to issue public information which may or may not turn out to be accurate upon the conclusion of these proceedings," Baltimore Circuit Judge Albert J. Matricciani Jr. wrote after a hearing on a suit by the Baltimore mayor and City Council that seeks to force the Public Service Commission to reconsider the deferral proposal.

The ruling cast more confusion over the electricity rate issue, which has dominated election-year politics for several weeks as customers have called for a way to ease rising costs.

A utility company official acknowledged last night that the decision will prevent BGE from enrolling customers in the deferral plan. Enrollment was to begin Monday.

Matricciani ordered a hearing on the city's lawsuit May 30, a decision that city officials said will leave time for the PSC to reconsider the deferral plan before July 1, when rates are set to rise.

Mayor Martin O'Malley said last night that he was "very pleased" with the judge's decision, which he said he hopes will result in a new hearing in which the PSC will be forced to reconsider the rate plan.

"Our hope at the end of the day is that we get more reasonable rates for the consumers and the working families of Maryland and that we start shining the light on this whole painful process that has been conducted largely behind closed doors," O'Malley said.

But Ehrlich accused the mayor, who is seeking the Democratic nomination for governor, of hurting consumers for political gain.

"In the seven years since Maryland lawmakers enacted a flawed electricity deregulation law, there has only been one credible plan put forth to protect working families from overnight 72 percent increases in their electricity bills," the governor said in a statement issued last night.

"Not only does Baltimore City's lawsuit lack any credible recommendations to keep electricity affordable, it could eliminate the only credible plan available to customers," Ehrlich said. "Difficult problems require credible solutions, and politically tinged attempts to mislead, delay and confuse fall well short of the bar."

City Solicitor Ralph Tyler argued in court yesterday that the PSC should be forced to hold new hearings on BGE's deferral plan and consider issues such as the pending merger between BGE's parent company, Constellation Energy, and a Florida utility; the compensation that Constellation managers will receive if the merger is approved; and the extent to which BGE's electricity supplies are coming from Constellation.

In the meantime, he said, BGE should discontinue a public advertising campaign to inform consumers about the plan. The company's previous efforts have only served to confuse the public, and more communications while the lawsuit is pending would only make matters worse, he said.

The judge, an appointee of former Gov. William Donald Schaefer, concurred.

Constellation spokesman Robert L. Gould said the company is "extremely disappointed" with the decision: "This action will significantly limit our ability to communicate with our customers."

The order allows BGE to continue its internal preparations for the rate deferral plan.

Gould said that as a practical matter, the judge's order will halt the sign-up because the company won't be able to do so much as tell customers what number to call to opt in.

The city's intervention in the case comes with strong political overtones.

Ehrlich announced the rate deferral plan with fanfare from the front lawn of the governor's mansion last month, declaring victory for consumers. The General Assembly had been working on ways to blunt the impact of the 72 percent increase during its 90-day legislative session. But the session ended April 10 without consensus, leaving Ehrlich to develop a solution.

O'Malley has been a harsh critic of the plan. He has called for the resignation of PSC Chairman Kenneth D. Schisler for being too closely aligned with utility companies, after the disclosure of e-mails showing discussions of internal PSC policy between him and a leading utility company lobbyist, who was also a lawyer for BGE until recently. The mayor also directed Tyler to initiate the suit.

Schisler criticized the city's action yesterday as "political posturing" that will only hurt consumers.

"We don't understand why the city has filed suit to stop something designed to help the ratepayers," Schisler said. "I believe that the city's actions are clearly motivated by partisan politics. They've offered no ideas, no solutions, no plan, just political attacks."

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