Steven B. Larsen turned out to be a double-edged political sword.
He was precisely what Gov. Martin O'Malley needed at the Public Service Commission: smart, experienced, tough and unlikely to get cozy with the businesses he was regulating.
He was in the job, politically speaking, to knock down energy costs borne by Maryland consumers. In his campaign, Mr. O'Malley had seemed to promise such a reduction.
If anyone could make the power guys back down, it was Steve Larsen. On the other hand, if he couldn't do it, maybe it couldn't be done. Maybe the governor had over-promised. Mr. Larsen's predecessors may have been chummy with the industry, but they may have been right about the new cost of energy.
Before and during his campaign, the governor was angry on behalf of Maryland voters. He promised to reconstitute the Public Service Commission so it could function with enough agility to fend off rate increases that - before the recent oil shock - seemed way out of line.
Maybe he just said he was going to make sure consumers weren't gouged. But Mr. O'Malley went to court to make his case for lower rates, winning considerable support from voters in the process. Here was another case of perception as reality. It's the kind of reality that could have a politically lethal half-life.
Mr. Larsen won significant concessions from Constellation Energy Group, saving consumers at least $187 million - $170 rebates for each household. Ratepayers might have faced even higher bills when the decommissioning of nuclear plants began.
But this was hardly enough to offset the big increases in utility costs as promised by the governor. The PSC chairman and the governor's office were engaged in animated conversations on the subject throughout Mr. Larsen's chairmanship. In the end, Mr. O'Malley is said to accept some of the realities of energy prices - even if he isn't ready to stand down in his pursuit of relief for consumers.
When Mr. Larsen sketched out the difficulties of lowering rates, he and the governor were stuck. Mr. O'Malley really couldn't go after him the way he had belabored Mr. Larsen's Republican predecessors, who, by the way, deserved it for their consorting with the regulated industry.
Thus when Mr. Larsen abruptly announced he was leaving the Public Service Commission, one possible reason was clear. He had decided his task was essentially undoable. He couldn't cut costs to consumers and increase supply at the same time. From the political perspective - the necessary perspective of his boss, Governor O'Malley - lowering consumer prices was still the objective.
