Power Games


Fired as Gov. Robert Ehrlich feuded with the legislature and the Public Service Commission, the new people's counsel prepares to take on the issue of electric rates

Q&a -- Paula M. Carmody

March 18, 2007|By Paul Adams | Paul Adams,Sun Staff

Paula M. Carmody recently stepped into the role of people's counsel at what may prove a watershed moment for Maryland's residential utility customers.

The state's Public Service Commission is in the midst of a sweeping review of electric deregulation rules that critics contend contributed to a 72 percent rate hike for customers of Baltimore Gas & Electric last year.

As the state's chief advocate for utility customers, the new people's counsel is charged with pressing the commission to adopt changes that will take the sting out of future utility bills. It's a position fraught with political peril as Gov. Martin O'Malley and lawmakers strive to make good on campaign promises to undo the damage.

But the politics of power is familiar territory for the former assistant attorney general. Carmody was fired from her job as assistant people's counsel in 2003, subsequently placing her in the middle of a political feud over whether Gov. Robert L. Ehrlich Jr.'s administration had purged Democratic appointees from state agencies for partisan reasons. A similar purging later took place a few floors away in the back offices of the PSC, where the commission's Ehrlich-appointed chairman, Kenneth D. Schisler, was criticized for firing a handful of professional staffers with deep backgrounds in utility matters.

At a legislative hearing looking into the firings in December 2005, Carmody described how her boss at the people's counsel's office appeared at her house in tears one September morning and told her she had to clear out by the end of the day. No explanation was given, she said.

Both Carmody's and Schisler's political fortunes changed just as abruptly when BGE's rate hike ignited a political firestorm over deregulation last year. Carmody's name appeared on a list of 10 candidates to replace all five PSC commissioners after lawmakers passed Senate Bill 1, which, among other things, fired both the commission and then-People's Counsel Patricia Smith. Lawmakers blamed leaders of both agencies for failing to protect consumers.

Schisler successfully fought the commission's removal in the courts and kept his job before resigning this year. But a provision in the law giving the attorney general power to appoint a new people's counsel remained in effect. In January, Carmody came full circle when newly elected Attorney General Douglas F. Gansler tapped her to lead the agency. Considering that your predecessor was fired through legislation, and given the heightened politics surrounding this position right now, do you feel pressure to take a harder line, or to approach the job in a manner consistent with those in Annapolis who voted for a change?

There definitely is some pressure there because of the underlying issues, I think, and because of the quite reasonable concern about electric rates, and the impact they have for consumers and businesses. But personally, in my view, what the members of the General Assembly and, I think, the attorney general are looking for is somebody to come in that has the experience, that knows the industry, that knows the players in the industry, knows the issues and will address them thoughtfully and carefully and present affirmatively a policy solution.

I don't necessarily think that the members of the legislature or attorney general are looking for specific policy answers for me to state, but what they are looking for me to do, frankly, is my job. And that is to go out, gather the information, make an assessment, use my judgment and state very clearly in a policy position what I think is best for residential consumers. I believe if I do that, I will be able to meet the expectations of at least many of the members of the General Assembly, the attorney general and, hopefully, consumers. This office, independently from lawmakers, has been an instigator in what could be described as a pretty comprehensive regulatory review of Maryland's power industry. What's your appraisal of that process so far?

Where we stand now is that this process needs to go forward and to move quickly toward a decision. This office back in March of 2006 did make a filing to the Public Service Commission asking the commission to review the state of restructuring regulations in Maryland, and this was coupled with activity in Annapolis which led to Senate Bill 1. Basically, coming into this structure, I'd have to say I am certainly supportive of those investigations, and it is my view that deregulation has not worked for small customers in Maryland. We do need to acknowledge those failures and move on to a different path to provide electric service to residential customers. And what I mean by that is to move away from focusing on the development of retail competition as the primary, or sole, goal, and to identify the provision of safe, reliable and affordable electricity to consumers as the primary goal.

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