Failure to regulate

June 01, 2006

It was more than a little ironic that the Maryland Public Service Commission's attorney showed up more than an hour late in court to defend the regulatory body against Baltimore's quest for a new hearing on pending electricity rate increases. The attorney's lame excuse - involving a "miscommunication" - turned out to be a telling prelude to Circuit Judge Albert J. Matricciani Jr.'s very justified ruling against the PSC.

After all, the city lawsuit boiled down to charging that the PSC - in rubber-stamping the governor's rate-relief plan after the skimpiest of reviews - had simply failed to do its job. And the judge, indeed, found that it had been mighty derelict in its statutory duties. Call it a failure to regulate - the logical outcome of Gov. Robert L. Ehrlich Jr.'s stacking of the PSC with industry-friendly commissioners and his sacking of longtime PSC staff to make way for more political appointees.

If the judge's ruling isn't overturned on a possible appeal and if a rehearing on the rate increase goes past the end of this month - when Baltimore-area electricity rate caps expire - then Baltimore Gas and Electric customers may well end up paying higher initial rates than if the PSC's favorable ruling on the governor's rate-relief plan had stood up to judicial scrutiny. If so, don't blame Baltimore Mayor Martin O'Malley for seeking a proper and thorough hearing on the rate increases; instead, blame the governor's PSC minions for not carrying out their responsibilities to the people of Maryland.

In the end, Judge Matricciani's order may not result in a better rate-relief plan, but it is supposed to result in public disclosure of information about why BGE's rates are going up and why Constellation claims it can only do so much to mitigate rising rates - information about how costs are allocated between BGE and its parent, Constellation Energy Group; Constellation executives' compensation if it merges with a Florida utility; and the extent of potential corporate savings from that merger.

Some of these critical details were likely to emerge from information BGE was in the process of providing to legislative leaders yesterday. But at this late date, the extent to which this information is just now becoming public is damning testimony to the PSC's rush to approve rate relief without much challenge or many questions for BGE or Constellation. And that was the wrong approach.

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