Head of utility board resigns

Schisler's move gives O'Malley control over PSC composition for electricity rate debate

January 30, 2007|By Andrew A. Green and Laura Smitherman | Andrew A. Green and Laura Smitherman,Sun reporters

The Public Service Commission chairman who has faced intense criticism for his handling of BGE rate increases last year and for his ties to industry officials resigned yesterday, giving Gov. Martin O'Malley effective control of utility regulation in Maryland.

Kenneth D. Schisler's resignation concludes a bitter, yearlong battle over former Gov. Robert L. Ehrlich Jr.'s efforts to install more industry-friendly regulators, a shift that critics said made the PSC a toothless check on the state's largest utility as it sought to boost rates by an average of 72 percent.

But the move does not bring an end to the uncertainty surrounding Maryland's electricity industry. Utility officials, advocates, lawmakers and others are watching the O'Malley administration to see how far the new Democratic governor goes in tilting the scales toward consumers at a time when the PSC is due to re-examine Maryland's entire regulatory structure.

A spokesman for O'Malley, whose blistering criticism of Schisler's close contacts with utility industry officials helped propel him to victory over Republican Ehrlich last year, issued a statement suggesting the new governor will appoint more aggressive regulators to the five-member board.

"We are thankful that Mr. Schisler stepped aside, allowing the Public Service Commission to move forward," Rick Abbruzzese, an O'Malley spokesman, said in a statement. He said the governor is eager to get "professional regulators back on the job."

Schisler, 37, a former Republican delegate from the Eastern Shore, successfully challenged an attempt last year by the General Assembly to strip him of his $117,000-a-year job. If O'Malley had tried to fire him, Schisler, an Ehrlich appointee, could have challenged that action in court as well.

Top lawmakers tried in recent days to broker an amicable separation - perhaps by arranging for the state to reimburse him for his legal bills - but O'Malley, who made firing the PSC a top campaign promise, refused.

The Maryland Republican Party paid some of the cost of Schisler's lawsuit against the state last summer, but legislators and others close to the situation say he amassed considerable debt while trying to keep his job.

Schisler tendered his resignation yesterday in a 16-word letter to the governor, saying he would step down at the end of Friday. In a news release, Schisler gave few additional clues as to what persuaded him to resign.

"During my tenure at the Commission I have endeavored to implement the policies enacted by the General Assembly in a fair, impartial and effective manner," Schisler said in the statement. "My resignation will facilitate the ability of the Public Service Commission to move forward in the important work it must accomplish."

Through a spokeswoman, Bethany Gill, Schisler declined to comment further.

Two vacancies

There are five seats on the commission, but one of them is vacant.

With future appointees to take the vacant spot and Schisler's seat, plus the vote of Commissioner Harold D. Williams, a Democratic appointee who has worked well with O'Malley, the governor can take effective control of the PSC without attempting to replace the other two commissioners, who are Ehrlich appointees.

Ehrlich set out to make the commission more business-friendly, a goal that sparked public outcry from legislators - including some Republicans - when BGE announced last year that its electricity rates would spike. Rate caps instituted as part of Maryland's 1999 electricity deregulation plan were due to expire last June as global instability in the energy market was driving prices sharply upward.

Schisler publicly argued that the commission could not have done anything under current law to stave off the increases, becoming a lightning rod for public discontent over the issue. Former regulators questioned his assertion.

Criticism intensified as e-mails were released that showed Schisler cooperated with utility industry lobbyists on legislation affecting the industry and arranged excursions with industry officials, including a hunting trip and a Houston Astros game.

Political issue

Electricity regulation became the dominant issue in Maryland politics last spring and summer, prompting a June special legislative session in which the General Assembly passed a law that effectively fired the PSC. Ehrlich vetoed it, and the legislature overrode him.

But Schisler sued, saying that only the governor could fire commissioners and then only because of incompetence or misconduct. He won in the state's highest court.

Critics in the legislature said they hope that a new PSC can provide more assistance to ratepayers.

"They were part of the problem, not part of the solution," Del. Patrick L. McDonough, a Baltimore County Republican, said of Ehrlich's commissioners. "As long as they were there, consumers were not going to get any relief."

Del. Warren E. Miller, a Howard County Republican who fought efforts to fire Schisler last year, said Schisler became a scapegoat for problems he didn't cause.

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