Senate defeats bill allowing gas utility surcharge

March 28, 2012|By Michael Dresser, The Baltimore Sun

A bill that would have let gas utilities seek a surchage of up to $2 a month on customers' bill was shot down -- for a second time --  Wednesday by a bipartisan coalition of senators who contended the measure would let monopolies charge ratepayers up front for infrastructure improvements the companies now have to finance out of their own coffers.

The Senate defeated the measure 22-24, reaffirming a similar vote earlier Tuesday. After the bill's original 22-23 defeat, a motion to reconsider passed, but a new debate Wednesday failed to reassure lawmakers that the bill provided sufficient safeguards for residential customers.

The legislation would have set out procedures under which the Public Service Commission could let the companies impose a charge of up to $2 a month per meter on gas utility customers in order to finance in advance projects to upgrade aging infrastructure such as pipelines.

But opponents contended the measure would have upended the traditional regulatory framework under which utilities typically renovate infrastructure and then go to the PSC to seek cost recovery in future rates.

Sen. James Rosapepe, a Prince George's County Democrat, described the bill as "deregulation lite," a reference to the state's decision to loosen price controls on electricity during the 1990s. He said the measure was opposed by the state People's Counsel, which represents residential ratepayers, and the AARP.

"This is the ultimate going after the horse after it's out of the barn," he said.

Sen.Brian E. Frosh, a Montgomery County Democrat, predicted the $2 cap would actually become a guaranteed $2 fee on each customer in the state. He noted that the $2 surcharge would apply to small residential and large commercial customers alike -- a point conceded by the bill's proponents.

Sen. Thomas M. Middleton, chairman of the Senate Finance Committee, defended the bill -- saying the companies would be able to finance projects more cheaply and share the savings with customers if they were assured of a stream of money up front.

"The customer's going to pay for it one way or another," said Middleton, a Charles County Democrat. He argued that the PSC has the authority to allow up-front charges now and that the bill would set guidelines for doing so that don't exist now.

"It's a very, very good bill that gives the consumers some protections they don't have now," he said.

Sen. John Astle, the Annapolis Democrat who sponsored the bill, said the legislation would promote the replacement of aging gas infrastructure, including piplelines that could be hazardous.

But the legislation went down before opposition from some of the Senate's most liberal Democrats and conservative Republicans.

"At the end of the day, I see this as a bailout bill," said Senate Minority LeaderE. J. Pipkin, an Upper Shore Republican who cast one of the four GOP votes against the bill.

Both times, the bill was defeated on a preliminary vote to approve a committee report -- a relatively rare occurrence. At least eight senators switched between the two votes on the measure, including Senate PresidnetThomas V. Mike Miller, who voted for it Tuesday and against Wednesday.

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