Power shift

November 09, 2006|By Paul Adams | Paul Adams,Sun Reporter

The political debate over the price of electricity in Maryland will take a new turn under O'Malley, who as a candidate pledged to fire Ehrlich's "business-oriented" Public Service Commission and "replace them with independent and competent members who will protect the public."

Whether he makes good on the threat will likely have a direct impact on residential electric bills and the state's power industry for decades to come.

The commission, which came under withering fire over its handling of a 72 percent electric rate increase this year, is poised to take up a number of legislatively mandated investigations that together will constitute the most sweeping regulatory review of the power industry since deregulation was passed in 1999.

Also looming is consideration of a plan to phase in the remainder of the electric rate increase, which was capped temporarily at 15 percent in June.

O'Malley has made it clear he wants a new PSC to investigate the reasonableness of Baltimore Gas and Electric Co.'s rates, as well as consider regulations to protect consumers from future increases. That could include peeling back aspects of deregulation, which power industry executives counter will disrupt competitive power markets and lead to higher costs in the long run.

How far the new governor gets in his bid to reshape the politics of power may depend on the courts. It's unclear whether state law would allow O'Malley to fire PSC commissioners, who are appointed by the governor but cannot be removed without cause. Commission Chairman Kenneth D. Schisler already sued once to keep his job, suggesting he may not go down without a fight.

Abbruzzese, the O'Malley spokesman, said a key priority of the governor-elect "is the immediate replacement of the Public Service Commission. ... I think a good argument can be made that they did neglect their duty."

Mayo A. Shattuck III, CEG's chief executive, has said he hopes to negotiate a settlement with lawmakers. Based on O'Malley's past statements, CEG can expect the governor to take an active role in those talks.

Paul Adams

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