Maryland cautious on energy proposals

Lawmakers say studies needed to devise full strategy

March 19, 2007|By Laura Smitherman | Laura Smitherman,SUN REPORTER

One year after the General Assembly fought a drawn-out battle over hefty electricity rate increases, some Maryland legislators thought their ideas for helping energy consumers that have languished for years might have a shot at passage.

But it appears some of those proposals might be relegated to further study rather than put to a vote. They include bills to boost energy conservation over the next decade and to better enable local governments to buy electricity at bulk rates for residents.

Legislative leaders, who decide which bills to push through to votes, say Maryland is at a crossroads and must examine its energy future to develop a comprehensive strategy that might or might not include the proposals. Meanwhile, alternative energy legislation might still be headed for passage this year, including bills that would expand wind and solar power production.

Nonetheless, the repeated rounds of study on certain proposals have frustrated some lawmakers.

"Students study and study and study, and at some point if they aren't ready to take the test, they flunk," said Sen. Brian E. Frosh, a Montgomery County Democrat who sponsored bills on conservation and bulk-purchasing, known as "aggregation."

"I think we flunked," Frosh said.

Legislators are feeling the pressure because the state is facing an energy crunch.

Maryland, which imports nearly one-third of its power, could see rolling blackouts in less than five years as electricity reserves on the regional grid are forecast to dip to historic lows. And despite a rate deferral plan approved by the General Assembly last year to lessen a projected 72 percent rate increase, residents could see their electricity bills rise by nearly 50 percent this summer.

Plans to build power plants, including a new nuclear reactor being considered by BGE's parent company, Constellation Energy, are years from coming to fruition and face opposition from environmentalists. Similarly, plans to build more high-voltage transmission lines have proved unpopular among residents who live in the proposed pathways.

Legislators say they are more comfortable this year directing the newly constituted Public Service Commission, which regulates the energy industry in Maryland, to conduct the studies. The agency was the subject of derision and mistrust last year, but it is now headed by Steven B. Larsen, Gov. Martin O'Malley's nominee and a former insurance commissioner who has won trust in Annapolis circles.

"There's a lot of confidence being placed in Larsen's stewardship," said Del. Dereck E. Davis, chairman of the House Economic Matters Committee and a Prince George's County Democrat. "There's a comfort level around here that he'll implement policies that take care of the consumer while taking into consideration the interests of business."

Even Frosh has his own proposal for more study. He sponsored a bill to create the Commission on Maryland's Energy Future to analyze the state's electricity supply, projected needs and alternative energy options. The Senate approved the bill last week; the House of Delegates has yet to act.

Rising energy bills for more than 1 million BGE customers leap-frogged to the forefront of last year's General Assembly session when BGE announced the increase in rates, which had been frozen for years as part of a 1999 deregulation plan that took full effect last year.

Legislators not only worked to blunt the increase, but they tried to fire members of the PSC they accused of being too cozy with the industry, a move that was struck down by Maryland's highest court. This year, through the replacement of two members who resigned and by filling a long-standing vacancy, O'Malley, a Democrat, has gained effective control over the panel.

The PSC released a report on electricity deregulation two months ago - when it was still headed by Kenneth D. Schisler, who was appointed by former Republican Gov. Robert L. Ehrlich Jr. and has since resigned - that some lawmakers found lacking in substance.

Under a bill being crafted by the Senate Finance Committee, the PSC would be directed to study the effects of deregulation and to look at the possibility of reversing it. The General Assembly passed the law aimed at opening the state's energy markets to competition in 1999, and critics have blamed that move for creating conditions that led to the large rate increases.

"We have come to a fork in the road at which we have to make a policy decision on whether we re-regulate or stay with the current system," said Sen. E. J. Pipkin, an Eastern Shore Republican and sponsor of the latest deregulation study bill. "The PSC was so steadfast in looking at the world in one way that it was hard for competing ideas to be considered."

Some form of re-regulation has gained steam among consumer advocates. "Energy is not something that we can say, `Well, I'll skip it this week because the price is too high,'" said Darrin Brown, a lobbyist for AARP, the retiree advocacy group.

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