Gov. Martin O'Malley laid out a blueprint yesterday for a partial return to a regulated energy industry, rejecting a decade-old policy that was intended to lower consumer prices through market competition but is widely regarded as a failure.
In the midst of an outcry over budget-busting utility bills, O'Malley unveiled a plan that would allow the state to regulate future power plants if such a move is determined to be in the best interest of customers.
The proposal also would allow the state to decide when new plants are built, taking that authority from utilities.
"I don't have to tell anyone, especially on a day like this in the cold winter," O'Malley said, "just what a tremendous amount of pressure Maryland families and especially people on fixed incomes are facing when you combine the national recession with rising energy bills."
O'Malley acknowledged that his proposal is not a "quick fix by any means" for customers grappling with soaring costs. In the meantime, he said his budget for next year includes a record $90 million to help low-income residents pay utility bills. He also noted that the Public Service Commission has opened an inquiry into the recent rate spike.
Mounting electricity prices have bedeviled O'Malley, a Democrat, since he campaigned more than two years ago on promises to fight rate increases. Since then, consumers have seen higher bills - in some cases doubling this winter - and the state faces a supply shortage that could lead to rolling blackouts as soon as 2011.
The governor acknowledged yesterday that few issues have taken more of his administration's time.
Bipartisan sentiment has grown in the General Assembly for revisiting the legislature's 1999 decision to deregulate the energy industry, and some leading lawmakers praised O'Malley yesterday for embracing some re-regulation.
But industry officials warn that if the state turns its back on deregulation, consumer choice would be squashed and energy companies would avoid doing business in the state. On the other side, a consumer group that has protested rate increases by Baltimore Gas & Electric Co. characterized the governor's proposal as politically calculated and insufficient.
"O'Malley is just feeling the pressure," said Maria Allwine, a consumer activist. His plan, she said, "is not going to do anything about rates we are paying right now."
