Is there hope for the `stranded' politicians?

May 21, 2006|By C. FRASER SMITH

Besieged by angry voters, the Maryland General Assembly searches for a plan that offers real relief from the 72 percent increase in utility costs that are to land in the voters' mail slots in July.

Lawmakers want to help. Do they ever. They see their legislative lives flashing before their eyes.

But they're faced with something like putting toothpaste back in the tube. They might get a little back in, but it might not be noticeable - and you could make an even worse mess.

To put it more directly: Don't expect too much relief.

The worst-case scenario? No relief. And the best case? Some relief that still leaves a painfully higher monthly bill.

There are immutable aspects of the situation. For example, real cost increases that can be demonstrated by the utilities. These demonstrations have been made during extensive negotiations by parties with plenty of political and financial self-interest in the outcome.

If there were obvious ways to help the consumer, they would have shown up in someone's plan. This is partly why, despite public pressure, a special legislative session has not been announced.

You can bet the legislative green-eyeshade guys are not getting much rest these days. But the Assembly's leaders won't call for a reunion unless they have a plan - and the votes to pass it in hand. They want to vote and get out of Dodge.

The politics of the situation, never far from anyone's election-year calculations, are formidable. Right now, Gov. Robert L. Ehrlich Jr. is on the hook. He offered something he called relief, but it amounted to delaying the pain. The charges that must be paid were undiminished.

Mayor Martin O'Malley and Assembly leaders are saying they might cobble together a better deal if more of the underlying facts are known. If the companies, Baltimore Gas and Electric and Constellation Energy Group, haven't fully disclosed the economics of the situation, legislators might use any new information to offer some relief.

Montgomery County Executive Douglas M. Duncan had been calling for re-regulation and may still want it. But the problem apparently is that relief can't come over that route for some time. The angry voter, of course, wants action now. So Mr. Duncan is saying the General Assembly has to convene and find a solution.

Governor Ehrlich says go ahead, make my day. If the Assembly meets and doesn't have a solution, he's off the hook for a plan that voters realized would take them nowhere. The Assembly, of course, created the hook by voting to deregulate the industry in 1999.

In recent days, critics have again raised the possibility that the proposed merger of Constellation and Florida's FPL Group is a perilous marriage for Marylanders. Will Free State money bail out FPL for hurricane-driven expenses? The local power guys say no way, but aren't they the ones who predicted competition would lower prices?

An appeal last week to House Speaker Michael E. Busch and Senate President Thomas V. Mike Miller demands "true rate relief," prevention of the circumstances that created and exacerbated the current situation and long-term protection of ratepayers' interest.

"Real solutions and change will require thoughtful deliberation and courage," says a letter to Mr. Miller and Mr. Busch from Baltimore's Sen. Lisa A. Gladden and Dels. Jill P. Carter, Nathaniel T. Oaks and Samuel I. Rosenberg.

The letter goes on to spell out a range of remedies that could, over time, have an impact on rates. None of them seemed to have what the legislators want: immediate, noticeable relief.

The legislators say the Assembly should pressure BGE and Constellation to apply $400 million in "merger savings" to the reduction of electricity bills. It would also put $528 million in "stranded costs" to the same use. These are dollars paid by consumers to compensate the utility for an anticipated loss of equipment value as a result of deregulation. Instead, the value largely rose.

It goes on to suggest a restructuring - firing, apparently - of Public Service Commission members. This action may feel good - and be well advised - but it's not likely to produce what the stranded lawmakers and the governor want: something a lot less than a 72 percent increase.

C. Fraser Smith is senior news analyst for WYPR-FM. His column appears Sundays. His e-mail address is fsmith@wypr.org.

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