BGE ads take off the gloves to combat `political rhetoric'

May 24, 2006|By PAUL ADAMS | PAUL ADAMS,SUN REPORTER

One newspaper ad was headlined, "The simple truth about the July 1 rate increase." In another set to run this week, Constellation Energy Group takes on what it calls "election-year politics."

For months, the parent of Baltimore Gas and Electric Co. has responded in measured tones, publicly at least, while Maryland lawmakers, consumer groups and BGE's customers have accused it of making windfall profits with a proposed 72 percent electricity rate increase.

This month, however, after a Baltimore circuit judge affirmed Mayor Martin O'Malley's suit to block BGE from publicizing its rate increase plan - and O'Malley cheered it as a victory "for working families" - Constellation executives said they had heard enough.

The state's largest utility has embarked on what it describes as the largest public relations campaign in its 190-year history to counter what it calls political rhetoric and misinformation. It is spending about $1 million on ads in 33 newspapers and on 20 radio stations and six television networks through July 1, when the new rates are scheduled to take effect as part of the state's move to a deregulated electricity market.

The public relations thrust attempts to bolster the company's image as it prepares to defend the rate increase in court and as it tries to head off the possibility that lawmakers in Annapolis might call a special session to reconsider the rate issue.

"The facts are on our side, and at some point the politicians will be criticized and even ridiculed for taking positions that are so misleading," Mayo A. Shattuck III, Constellation's chairman and chief executive officer, said in an interview Monday.

Though Constellation has been aggressive for months in lobbying politicians and talking to news reporters, the new ad campaign raises the volume in the public debate over electric rates, which have become a major issue in the approaching campaign season.

Public relations experts say the company is taking time-tested steps to regain control of the debate but is taking a risk with its more aggressive stand. The ad campaign could alienate politicians and the public, experts said, but doing nothing would allow others to shape an emotional debate over rates.

"They should do that - take on the political rhetoric," said Elliot Sloane, who heads a public relations and crisis management firm in New York. "Take elected officials and call them on it. The public gets that."

The ads repeat messages that Constellation has been trying to drive home for the past two months with limited success.

Among them is that BGE's electricity rates have not increased since 1993 and that the utility's customers have saved more than $1 billion as a result of the frozen rates.

If the 72 percent increase were spread over the 13 years since then, the company says, it would amount to an increase of about 3.5 percent a year. That would be in line with inflation and far less striking than rising costs for things such as gasoline, health care and real estate, the ad says.

Rates compared

One ad contains a graph comparing BGE's rates with those of other utilities in deregulated markets where rate caps have expired. In that comparison, BGE's rates are a few dollars a month more than those of other Maryland utilities and far lower than those in states including New York, Massachusetts and Connecticut.

In an obvious dig at O'Malley, Shattuck said that when spread over 13 years, BGE's rate increase is less than the increase in city property taxes, sewer, water and other services.

"Our position is unassailable, and it's unassailable in the eyes of the public when we get the facts out," he said.

The mayor's office counters that Constellation is being selective in what it discloses in its ads and that politics is not behind O'Malley's recent legal efforts to get the utility to disclose financial information and secure a better deal for BGE customers.

Hearing Tuesday

The city sued to stop BGE from publicizing a state-approved plan to phase in the rate increase over two years until the city's lawsuit challenging the rate increase could be settled. A circuit judge granted the request, and a hearing is scheduled for Tuesday.

"There's no political rhetoric here," said Raquel Guillory, a spokeswoman for the mayor, who is a candidate for governor. "We've said all along that we are in search of information, of basic facts that should have been considered" by the state Public Service Commission.

City officials said the BGE ads won't slow their efforts to force Constellation to open its books to further examination.

The O'Malley administration says the PSC, which approved the rate plan, didn't delve into whether the increase could be lowered by forcing BGE and its corporate parent to cut costs or trim profits for the benefit of customers.

Among other things, the city has asked the company to reveal how much of BGE's power is supplied by Constellation, which owns BGE's former power plants and sells electricity to the highest bidder.

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