Steven B. Larsen, who took over the Maryland Public Service Commission with a mandate to lower utility bills, is leaving the panel before finishing a yearlong quest to reregulate the industry, a source close to the O'Malley administration said yesterday.
Gov. Martin O'Malley is expected to announce today that Larsen will be replaced by Douglas R.M. Nazarian, a former litigator who joined the PSC as general counsel last June, said the source, who requested anonymity to avoid pre-empting the governor's announcement today.
Larsen, who before joining the PSC was executive vice president of health insurer Amerigroup Corp., declined to comment about his departure yesterday. Amerigroup, which has operations in Maryland, confirmed last night that Larsen is returning to the company as senior vice president of government affairs.
Larsen's departure comes as the commission is fighting to challenge state and federal regulations that it says are contributing to higher utility bills. He was appointed by O'Malley a year ago and charged with bringing credibility back to the PSC, which was criticized for being too pro-business under his predecessor, Kenneth D. Schisler.
O'Malley, a Democrat who took office last year, campaigned on a pledge to roll back utility rates. Those costs are 85 percent higher for customers of Baltimore Gas and Electric Co. since Maryland's power market was deregulated in 1999.
The panel's inquiry into reregulating the industry and lowering power costs is not complete. That leaves many perplexed by the sudden leadership change.
"There's still plenty on the plate," said Paula Carmody, Maryland People's Counsel, who represents utility customers before the commission. "I'm very surprised to hear this, that there would be such a change in the middle of the discussion of these issues, and with cases pending. It just doesn't compute."
Under Larsen, the PSC hired consultants and experts, conducted numerous studies and opened a series of inquiries aimed at winning lower rates for consumers. The five-member panel's work helped drive a roughly $2 billion settlement between the state and BGE parent Constellation Energy Group in a dispute over terms of deregulation. That settlement includes $170 credits in September for BGE's 1.1 million customers.
Regulators also recently joined a federal complaint seeking up to $2 billion in rebates for Maryland consumers. That complaint is part of a broader campaign by the state to challenge federal regulations governing the wholesale energy market and one driving force behind rising rates.
