Hearing supports Ehrlich's opinion

Governor to decide by tomorrow on vetoing rates bill

June 21, 2006|By ANDREW A. GREEN AND KELLY BREWINGTON | ANDREW A. GREEN AND KELLY BREWINGTON,SUN REPORTERS

Gov. Robert L. Ehrlich Jr. heard hours of testimony yesterday about whether he should veto a General Assembly plan to defer most of BGE's looming 72 percent rate increase for nearly a year, with analysts, experts, community leaders and homeowners arguing both sides in the most visible discussion yet of how large electric bills should be for more than a million utility customers.

The unusual public hearing was televised live on Maryland Public Television and broadcast on the Internet by two Baltimore television stations. The governor's office arranged the schedule of speakers, and opponents of the Assembly's plan outnumbered supporters by nearly 3 to 1.

The testimony appeared unlikely to sway the course of the debate over the legislation, which the General Assembly passed last week in a brief special session.

The governor, who has until midnight tomorrow to decide whether to sign or veto the bill, started the hearing by questioning key provisions of the legislature's plan, then heard from a series of witnesses who bolstered his position.

Proponents of the legislation got a chance to speak about two hours later. The governor gave no indication that their testimony altered his thinking.

In questions to those who testified, the governor repeated his objections to the bill: that consumers have no choice about whether to participate in the legislature's plan; that BGE would be charging interest on deferred payments; and that the Public Service Commission and the People's Counsel - appointees of the governor - would be replaced.

"This administration has a choice: Sign this bill or veto and ask the General Assembly to provide a more consumer-friendly product, one that offers consumer choice and no interest," Ehrlich said at the start of the hearing.

The legislature passed its plan, which limits the July 1 rate increase to 15 percent, with a veto-proof majority in both chambers. Lawmakers are poised to return for an override vote if necessary. Several Democrats, joined by a Republican supporter of the bill, held their own news conference during Ehrlich's hearing and said the questions had not diminished their support.

Del. Neil F. Quinter, a Howard County Democrat, blamed the governor for using the hearing as a "misinformation campaign" for political gain. He said the governor has mischaracterized the average $2.19 monthly charge on customers' bills as containing interest.

"The reality is that consumers are going to be paying no interest, and BGE is covering all the interest and half of the principal on the amount that is deferred," he said.

As the lone Republican promoting the legislature's plan, Sen. E.J. Pipkin of Queen Anne's County maintained that politics has gotten in the way of a good plan for consumers.

"For the everyday consumer, this bill offers relief from a very tough increase," Pipkin said. "It doesn't wave a magic wand to say it goes away, but it works with people."

Lawmakers called themselves back to Annapolis for a special session - endorsed by the governor - after Baltimore Mayor Martin O'Malley won a legal victory in a lawsuit that claimed a rate deferral plan negotiated by the governor was not properly reviewed by the PSC. The commission then reinstated a deferral plan considered less generous, sparking outrage among many lawmakers.

Ehrlich scheduled yesterday's hearing to reclaim the spotlight in an issue that has become a major part of the governor's race this year, and his office arranged the schedule of speakers.

Some of the scheduled witnesses - including a few current and former Republican candidates for office - used their time to compliment Ehrlich or criticize Democratic lawmakers.

"The consumers should have no interest payment in the plan. We should be able to opt out, and we should have rate caps," said Diane McNeil, a Baltimore retiree. "These requirements should be etched in stone."

"This bill should more accurately be called the get-me-elected-first-before-the-rates-kick-in plan," said Scott Conwell, a Baltimore attorney.

BGE rates are set to rise 72 percent on July 1 when rate caps instituted as part of Maryland's 1999 deregulation of the electric industry expire. The proposal allows for BGE to collect interest on deferred payments, but legislators say concessions from the company would wipe out those charges plus much of the principal.

Supporters of the bill also got a chance to speak. Baltimore City Solicitor Ralph S. Tyler, who argued the lawsuit on behalf of O'Malley, a Democratic candidate for governor, said that the PSC must be replaced because it failed in its duties to investigate the rate increase and allowed rates to go up for budget-billing customers before caps expired.

"I don't think this is a proud day for the Public Service Commission of this state," Tyler said. "They did not serve the public."

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