The perils of promises

June 10, 2007|By C. FRASER SMITH

How did this happen? A 72 percent increase in rates, costing consumers and seniors while energy companies make record profits. The special interests already have their governor. We need one of our own. Martin O'Malley is taking on BGE to stop the rate hike. - 2006 ad for Martin O'Malley's gubernatorial campaign

And how did this happen? A TV campaign commercial that included a risky promise - or at least the appearance of a promise: "taking on BGE to stop the rate hike." There's not much wiggle room there.

Thus, Gov. Martin O'Malley can't credibly say he didn't promise relief. Here's what he might have or should have said.

"Dear consumer: I feel your pain, but there may be little we can do about it in the short run. The rates were governed by the marketplace, the weather (storms reduced supply and drove up prices) and other factors - and will likely stand unless we can show some egregious flimflam. Without that, the best we can promise is a better process down the road."

Can't you just hear the campaign commercial guys? Too many words. You're a candidate. You're living in a world where lengthy explanations are poison. You have to be clear and decisive.

So the ad said, "Martin O'Malley is taking on BGE to stop the rate hike."

Now he's paying the penalty. He's having to answer questions about how and when he took on Baltimore Gas and Electric Co. - and why BGE seems to have won. (The long explanation still won't work.)

It's not a fight he needs. All things being equal, the new governor would have been spending this summer and fall figuring out how to close a $1.3 billion state budget gap - the so-called structural deficit, the difference between spending commitments and income. That solution is likely to include tax increases.

He hardly needed to see another big expense landing on Marylanders. In the past, things such as sales taxes have shortened political careers. One big new expense in a four-year period would have been bad enough, even when it's not your fault. Two of them and you could be talking major damage. These new costs will arrive in the mail every month, not the kind of reminder you want if you're a public official who promised relief.

The new governor should be ready for new suggestions that he went off once again without thinking about the consequences. Some people will remember his promise to reduce the murder rate in Baltimore from 300 or so to 175.

The promise was a good thing, because it took on a big problem without overthinking the consequences of failure. Too much focus in leadership today is placed on meeting the goal. Choosing the right goal and staking a lot of capital on reaching it is important, too.

Hitting easy targets may not amount to much.

In the matter of rate increases, he was right to promise his best effort. Of course, he wanted to show the difference between a Democrat and a Republican in the governor's office.

But Mr. O'Malley may regret suggesting he could solve the dollars-and-cents dilemma of more than a million consumers before he fully understood the scope of his chore. He was inclined to overreach, perhaps because he had given himself an advantage in the race for governor by taking the regulators to court and winning a judgment that important procedures had not been followed.

The difficulty for Mr. O'Malley is this: The rate problem is a complicated one, involving everything from tropical storms to costs of pollution-control devices - all of which find their way into the consumer's bill. He also has the disadvantage of having appointed a skilled and principled analyst, Steven B. Larsen, to the job of chief regulator; he gets credit for that, but he's also stuck with the regulator's finding that next to nothing can be done about the problem now. Had the earlier batch of regulators not appeared so dismissive of regulation, their work might not have seemed so deficient. Deficiencies may have led the new governor and others to believe there was a quick and easy solution.

Mr. O'Malley has announced a plan to ease the shock, a bit of state aid for low-income ratepayers. But he'll be hard-pressed to stay upright in the wind tunnel of recrimination.

C. Fraser Smith is senior news analyst for WYPR-FM. His column appears Sundays in The Sun. His e-mail is fsmith@wypr.org.

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