On BGE rates, the big picture and the small

Public Editor

June 25, 2006|By PAUL MOORE | PAUL MOORE,PUBLIC EDITOR

The Sun has given prominent coverage to the most dramatic aspects of the BGE rate increase story: legislation passed by a special session of the General Assembly that caps the initial increase at 15 percent instead of 72 percent, fires all current members of the Public Service Commission, which oversees utility regulation, and restructures the commission.

The newspaper also has paid close attention to a public hearing on the bill that was chaired and tightly controlled by Gov. Robert L. Ehrlich Jr., and to the governor's subsequent veto of the legislation. The Assembly was expected to override that veto.

Even though these stories got big front-page play, the newspaper's reporting on the less-visible aspects of the BGE legislation and the long-term ramifications for Maryland's energy needs has been more relevant for many readers.

For The Sun to be successful means providing readers with the big picture without losing sight of the details.

The newspaper's broad coverage has not satisfied everyone. Some have complained of inadequate emphasis on the fact that consumers have no choice about whether to participate in the legislature's plan and that all ratepayers will now be charged interest on their deferred payments.

This perceived deficiency was addressed by Andrew A. Green's Thursday article about Ehrlich considering a veto of the bill - which examined these two issues in depth and provided readers with a better understanding of why the Assembly, the utility and the governor are still grappling with them.

Reader Tim Kjer had this question: "How does this legislation address issues such as `ringfencing,' a separate BGE board, separate real estate for the utility, strict limits on dividend and asset transfers, mandatory capital ratios and the ability to block a voluntary bankruptcy? Readers deserve to see what the legislature is doing and what they are neglecting to address."

Ringfencing? The Sun's Jay Hancock, who has consistently examined fine-print issues in his business section columns, described it as protection for ratepayers from unwittingly financing investments by a utility (BGE) or its holding company (Constellation Energy). He also has said that a ringfence should prevent ratepayers from having to bail out a utility if a deal goes bad.

Hancock responded to Mr. Kjer: "You make excellent points. Included in the bill are provisions for lots of studies and hearings between now and the end of the year. My hope is that they will produce reforms that will improve Maryland's situation on all the issues you mention."

In his June 14 column, Hancock reported on important long-term remedies found in the legislation. He noted that the new bill will change how BGE and other utilities buy electricity and pass on the cost to customers. This will give the utilities more leeway to purchase electricity and lock in long-term deals when prices are lower. BGE was forced to buy large amounts of electricity during a period of record-high prices fueled by Hurricane Katrina and Middle East instability.

The Web site baltimoresun.com's blog about Maryland electricity issues has also been effective in explaining details to readers. Hancock said of the blog: "We're trying to cover a narrow topic in a broad way - politics, Wall Street, regulatory policy and whether to insulate your attic, all in one place. Reader appetite for electricity information is apparently insatiable, and the blog is another way to respond to it."

Initial articles about legislation to fire the Ehrlich-controlled PSC, which was criticized for being too cozy with energy companies and not working in the interests of consumers, were mostly reported through a political prism. But recent stories by Sun reporter Paul Adams have offered readers a broader context about how changes at the PSC will affect a number of other businesses.

Adams' June 18 article documents how phone providers, bus lines, water utilities, taxi drivers, cargo ships and other companies awaiting decisions from the PSC face uncertainty and project delays that could cost them millions of dollars. The detailed article is an important reminder that the PSC has a much larger scope than just monitoring electricity rates.

Reader Frank Maisano, who represents a firm with a project waiting for PSC approval, sums up the frustrations of many: "All bets are now off. Will the project have to start over? Will there need to be more public hearings? How much time will the new commissioners need to get up to speed on the complex details?"

Then, in an article on Tuesday, Adams reported that concerns about the legislation recently passed by the Assembly could deter potential competitors of BGE from entering the Maryland energy market, thereby limiting future consumer options for cheaper electricity.

This is the kind of reporting necessary to ensure that readers continue to get the big picture.

Paul Moore's column appears Sundays.

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