Revenge of the PSC

September 17, 2006

The decision by Maryland's highest court to prohibit the General Assembly from replacing members of the state Public Service Commission is much more than a rebuke of the legislature or a short-term political boost for Gov. Robert L. Ehrlich Jr. The court ruling is nothing short of a serious blow to consumers. It means recent efforts to reform the way Maryland regulates power companies have been short-circuited - and that can't be good for anyone's utility bill.

The ruling by the Court of Appeals was certainly no endorsement of Chairman Kenneth D. Schisler and his fellow commissioners. Rather, it turned on the specifics of how the legislature chose to remove them from power. While the exact reasoning of the court is muddled (there are four different lines of thought expressed in the 126-page opinion), it appears the legislature goofed not by overreaching but by under-reorganizing. Lawmakers have always had the authority to restructure government - even if that means firing certain appointees - but apparently not if the changes are as minimal as the court perceived them.

Obviously, the General Assembly can't go around replacing judges or any other constitutional officers, as a lawyer from the state attorney general's office foolishly argued in this case. But it's no longer clear where the lines of legislative oversight can be drawn in such matters, and that poses problems, too.

This much is crystal clear: Consumers are stuck with a PSC far too closely tied to industry lobbyists and political interests. This is the same crew that wasn't up to the task of regulating Baltimore Gas and Electric or even accommodating public involvement in the regulatory process. In retrospect, the 1999 law deregulating utilities was as flawed as Mr. Schisler likes to point out, but he and the PSC had years to offer remedies and attempted nothing of the kind.

On the other hand, the law passed by the legislature in special session several months ago did much more than scrap the PSC and defer the planned 72 percent rate increase until next year. It directed a new commission to use this time to pursue fundamental changes in the way utilities are regulated and how they purchase power, and to explore some long-term solutions to the state's energy woes. How can the legislature trust the discredited board with such duties? It can't and likely won't.

That leaves consumers in the cold - and the timing couldn't be worse. The PSC must decide in the next few months if the planned merger of Constellation Energy Group with Florida's FPL Group is in the best interests of ratepayers. But now it's not even certain that the PSC has jurisdiction. Thanks to the court, Mr. Schisler's victory could end up making BGE customers the real losers in all this.

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