3 county executives push for new PSC

Officials join call for special session

May 26, 2006|By ANDREW A. GREEN | ANDREW A. GREEN,SUN REPORTER

Saying the Public Service Commission failed to follow state law in approving a BGE rate increase deferral plan, the elected leaders of the three largest counties in the Baltimore area demanded yesterday that the governor and top General Assembly officers immediately convene a special legislative session to reconstitute the embattled regulatory body.

The letter from Baltimore County Executive James T. Smith Jr., Anne Arundel County Executive Janet S. Owens and Howard County Executive James N. Robey, all Democrats, is a boost to Baltimore Mayor Martin O'Malley, a Democratic candidate for governor.

O'Malley has been critical of Republican Gov. Robert L. Ehrlich Jr.'s appointees to the PSC and has filed a lawsuit seeking a new hearing on the rate plan that allows cross-examination and a broader scope of testimony.

Ehrlich and BGE officials have dismissed O'Malley's criticism as election-year posturing, but the action by the three executives demonstrates the widespread concern over this summer's looming 72 percent electric rate increase and a growing lack of confidence in the PSC to provide relief.

The letter came hours after BGE filed documents in Baltimore Circuit Court asking a judge to order the PSC to reconsider the rate stabilization plan at a new hearing with sworn witnesses and cross-examination.

`A flawed process'

The PSC recently made a similar request. Together, the motions show that both state regulators and the utility company "appreciate the seriousness of the PSC's failures and want the opportunity to satisfy the procedural requirements of the law," the three executives said in their letter. However, they wrote, it would be impossible for commissioners who agreed to the rate plan "through such a flawed process" to provide a fair rehearing.

"Thus, we are joining with those many others who have urged the governor and presiding officers to call a special session as expeditiously as possible, and, at a minimum, to reconstitute the makeup of the Public Service Commission," the executives wrote. "Any further hearing with respect to the BGE rate increase should be considered by persons who have not already expressed their opinions in a tainted process and who could exercise their independent judgment respecting this matter of such significance to the people of Maryland."

City officials said yesterday that BGE's motion was effectively an admission that the PSC's process in approving the order was flawed and that the plan must be thrown out.

"BGE makes no attempt to defend the procedure followed by the commission at its April 27 hearing," said City Solicitor Ralph Tyler. "They agree that the case should be remanded and the PSC order should be vacated.

"They wouldn't be arguing it should be vacated if they thought the process was lawful."

Robert L. Gould, a spokesman for BGE's parent company, Constellation Energy Group, said the company's motion was simply a restatement of its previous agreement to participate in a new hearing, which he said was a matter of expediency given the short time before the rate increase takes effect.

Gould said the city's claim "is the farthest thing from our position" and is just part of the mayor's effort to bolster his run for governor.

`Spin machine'

"What we're trying to do is expedite a rate stabilization plan for our customers, and yet this is another example of the O'Malley administration spin machine trying to use the pending rate increase as a means to win the November gubernatorial election," Gould said.

PSC spokeswoman Christine E. Nizer could not be reached for comment last night.

Electric bills are slated to rise by an average of 72 percent with the July 1 expiration of rate caps instituted as part of Maryland's 1999 deregulation of the electric industry. The legislature failed at the end of the General Assembly session to agree on a rate relief proposal, so Ehrlich negotiated a new plan with Constellation officials last month.

That plan, which is optional for BGE customers, limits this summer's increase to 19.4 percent and brings consumers up to market rates over 18 months. But those who participate would have to make up for the deferred payments with a monthly fee that begins in June 2007. Participating customers would pay higher bills as a result until the fee is lifted two years later.

The PSC held a hearing on the plan in April but did not allow sworn witnesses or cross-examination. Commissioners also resisted attempts by Tyler and others to introduce into the discussion factors such as Constellation's pending merger with a Florida utility, BGE profitability and executive compensation.

The city's lawsuit seeks a new hearing and an order for commissioners to consider those issues. A hearing on motions in the case is scheduled for this afternoon, and a hearing on the merits of the case is set for Tuesday.

Owens said in a statement that a new PSC is necessary to make sure rate increases are affordable.

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