Md. PSC appeals judge's ruling

Court asked to reject city BGE-rates effort

May 13, 2006|By KELLY BREWINGTON | KELLY BREWINGTON,SUN REPORTER

The state's utility commission filed an emergency request yesterday asking Maryland's highest court to reject Baltimore City's attempt to stop Baltimore Gas and Electric Co. from telling customers how to defer part of a 72 percent increase in rates.

The Public Service Commission filed the motion with the Maryland Court of Appeals. It seeks reversal of a lower court ruling that orders the utility to stop publicizing the electricity rate deferral plan, saying that customers are being harmed by not receiving information about a rate plan that would defer this summer's rate increase for BGE's 1.2 million customers.

"Not only does Baltimore City's lawsuit offer no relief from rate increases, it threatens the one choice available to help customers deal with rising electricity rate costs," said PSC Chairman Kenneth D. Schisler in a statement. "Baltimore city's efforts to eliminate the rate stabilization plan adopted by the commission could result in customers facing no other option than an overnight 72 percent increase on July 1.

FOR THE RECORD - An article about the Public Service Commission in Saturday's editions of The Sun misstated the name of the appeals court in which the agency filed its motion. The motion to reject Baltimore City's attempt to stop Baltimore Gas and Electric Co.'s electricity rate deferral program was filed with the Maryland Court of Special Appeals.
The Sun regrets the errors.

But city officials called the PSC's motives anti-consumer.

"Today's action by the taxpayer-funded Public Service Commission is another blatant and outrageous attempt by the PSC to protect the interests of BGE and force the citizens of Baltimore City to bear the burden of a 72 percent rate increase," said Mayor Martin O'Malley in a statement. "The PSC has repeatedly demonstrated no interest in determining if such a drastic increase is warranted and continues to protect the interests of big business and not the ratepayers."

The city wants new commission hearings on the rate increase, a review of a pending merger between BGE's parent company, Constellation Energy, and Florida-based FLP Group Inc. and scrutiny of executive profits from the merger if it goes through.

The looming rate increase has monopolized political discourse for months and has become the fuel for partisan barbs between Gov. Robert L. Ehrlich Jr., who is seeking re-election, and O'Malley, who is seeking the Democratic nomination for governor.

The city sued the PSC this month to stop implementation of BGE's rate deferral program and force the utility to end its publicity campaign.

The PSC voted in private last month to approve the plan, which was the result of negotiations between Ehrlich and officials from Constellation Energy.

The agreement, which offers customers an option to phase in the plan over two years, came after the General Assembly failed to legislate a mitigation plan for ratepayers.

BGE's customers are slated to get the full increase July 1, when rate caps expire as a result of Maryland's 1999 plan to deregulate the electricity industry.

On Tuesday, Baltimore won a first-round victory, when a Circuit Court judge granted the city's request to halt BGE's publicizing of the plan. It was a blow to the PSC and to its embattled chairman, Schisler, whom O'Malley has called on to resign.

Yesterday, the Court of Appeals gave Baltimore officials until 10:30 a.m. Thursday to file a response to the motion, said City Solicitor Ralph Tyler. A hearing on the city's lawsuit is scheduled for May 30.

Tyler said he would continue to argue that BGE's plan has only confused customers and that no further information should be distributed to the public until the lawsuit is settled.

"This is a bad deal for BGE customers and the PSC did not do a good job," he said. "The idea that there is no choice but to accept 72 percent is the idea that we reject."

But BGE spokesman Robert L. Gould complained that the city's actions are further confusing customers.

Gould said that the drawn-out court proceedings are politically motivated and distracting.

"It is extremely unfortunate, particularly for our customers, that we find ourselves in this position, where politicians, in this case the mayor, with clearly nothing more to gain than political brownie points, continues to engage in reckless rhetoric," he said.

kelly.brewington @baltsun.com.

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