Promising too much brings political perils

June 15, 2008|By C. Fraser Smith

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.

In service to that objective, Mr. Larsen had filed a petition with the Federal Energy Regulatory Commission pressing it to reduce energy costs in Maryland and other states. Rates, he wrote, are "unjust and unreasonable and must be adjusted." To follow that declaration with a resignation stunned Larsen watchers who had been schooled to think of him as a fighter.

His departure may simply be the usual flow of people in and out of government. Mr. O'Malley, though, faces the difficult task of convincing voters that he did all he could do, that he was up against the same world market dynamics that force gasoline and grocery bills higher. High gas prices may, in an odd sort of way, help to make his case.

People have a tendency to be unsympathetic to this sort of explanation. Even if they're willing to accept the beyond-my-control argument, they don't like unkept promises or even the perception of one.

Promises are not all bad in politics. They may be the heart and soul of leadership. Too many people who want to lead are fearful of being punished by the voters if they sketch out objectives they can't reach. If you don't reach beyond your grasp, though, is progress possible? It's a balancing act always.

In this situation, Mr. O'Malley and others might want to find a way to offer what they believe is the truth - to fight on for fairness, of course, to have the sharpest advocates.

Thus, the governor introduces Maryland to Douglas R. M. Nazarian, currently the PSC's top lawyer. He too will take on the energy barons. He's said to be smart, tough and experienced, just the man for the job - a lot like Mr. Larsen.

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

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