Special session planned

Assembly to create electricity rate deferral proposal

June 06, 2006|By ANDREW A. GREEN | ANDREW A. GREEN,SUN REPORTER

Gov. Robert L. Ehrlich Jr. announced yesterday that he will call a special session of the General Assembly to develop an electricity rate deferral plan because the alternative the Public Service Commission adopted last week is unacceptable.

The governor's announcement came hours after the Assembly's Democratic leaders began informing lawmakers that they had agreed to convene a special session next week. Such sessions can be called by the governor or by a majority of the legislature.

Senate President Thomas V. Mike Miller said the PSC's response last week to a legal victory by the city of Baltimore - reinstating an earlier rate deferral plan that charged consumers 5 percent interest - was the last straw for the legislature. The governor's announcement, Miller said, was an attempt to avoid being left behind.

"It came about because the speaker and myself agreed to a special session next week," Miller said.

In a letter to Miller and House Speaker Michael E. Busch, Ehrlich blamed Mayor Martin O'Malley for making a special session necessary, saying O'Malley harmed consumers with his lawsuit to throw out a plan the governor negotiated with utility company officials. O'Malley is seeking the Democratic nomination for governor and has seized on the rate issue as a theme in his quest to defeat Ehrlich, a Republican.

"Due to Baltimore City's interference, more than one million Marylanders were saddled last week with an electric rate stabilization plan that includes far less assistance than the plan negotiated with Baltimore Gas and Electric and Constellation Energy in April and includes no concessions whatsoever from energy companies for working families," Ehrlich wrote.

Ehrlich asked lawmakers to revive a plan that failed in the final minutes of the General Assembly session, but he said he would welcome "any specific and credible plans, if you have any, that would further benefit customers in addition to the plan we negotiated in session."

That plan included no interest charges and brought consumers up to market rates over 18 months. The plan the PSC approved last week establishes market-rate pricing in nine months.

Miller said the governor's suggestion for how to help consumers is "totally unacceptable."

"It doesn't provide enough in terms of rate relief, and it doesn't abolish the Public Service Commission," Miller said. "This Public Service Commission has got to go."

Busch said he and Miller have discussed limiting initial rate increases to 15 percent, reconstituting the PSC, allowing municipalities to buy power in bulk and resell it to consumers, and requiring Constellation to sell power to BGE at lower rates.

"I think everybody believes we can fashion a better solution than the one we have out there now," Busch said.

Miller said he and Busch agreed yesterday to call a special session next week. He said they planned to announce it at today's meeting of legislative leaders.

Yesterday's letter was not a formal proclamation of a special session, which the governor can call unilaterally. Ehrlich spokesman Henry Fawell said that such a move would require setting a date for a session, but a timetable has not been developed.

BGE electric rates are set to go up 72 percent July 1, with the expiration of rate caps instituted as part of Maryland's 1999 deregulation of the industry.

Yesterday's announcement capped a day of maneuvering over what has become the biggest issue in the state months before a gubernatorial election.

Ehrlich aimed directly at O'Malley yesterday, accusing him of "a negligent decision" in filing the lawsuit.

"What were they thinking?" Ehrlich said in an interview. "What's he accomplished, higher rates?"

O'Malley responded with a statement saying that it was the governor's PSC that approved the 72 percent rate increase and that the city took the panel to court to get a better deal. The judge ruled in the city's favor.

"Our goal is to reduce the 72 percent rate hike - and remove the Ehrlich Public Service Commission," O'Malley said in the statement. "We will continue [the] fight for the interests of working families - not those of powerful corporations."

O'Malley hit on the same themes in a campaign commercial that began airing yesterday, his first of the gubernatorial race. It boasts of his administration's accomplishments in forcing a new hearing by the PSC on the rate increase deferral Ehrlich negotiated.

Montgomery County Executive Douglas M. Duncan, who is also seeking the Democratic nomination for governor, said in a statement that he was "glad that the governor finally recognizes there is an energy crisis in the state of Maryland." Duncan has been calling for a special session for weeks.

"While it appears that the governor wants to fight with the mayor, and the mayor wants to fight with the governor, it's time that the debate really be about what's best for Maryland's residents," Duncan said in the statement.

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