Deregulation

Baltimore Circuit Judge Albert J. Matricciani Jr. spent the better part of the summer of 2000 learning the inner workings of the utilities world. That September, he issued an opinion that effectively removed the final obstacle to deregulating the electricity industry in Maryland. More than five years later, Matricciani again finds himself pondering public utilities. He issued an order late Wednesday prohibiting BGE from advertising its rate deferral plan while the court considers a city lawsuit that would send the proposal back for more regulatory review.

Gov. Robert L. Ehrlich Jr. has repeatedly referred to himself a "neutral arbiter" in negotiations with Constellation Energy Group over rising electricity rates, saying a problem was dumped in his lap as a result of a deregulation plan passed by the General Assembly in 1999 when he was in Congress. At the time, however, Ehrlich was a notable supporter of lifting regulations on power companies. As a Republican member of the House Energy and Power subcommittee, he was one of 16 congressmen to vote in October 1999 for a bill to lift federal regulations on power companies and to encourage states to make decisions to foster competition.

VALLEY FORGE, Pa. -- Though consumer anger is largely focused on BGE, some say the true origins of Maryland's rising electricity prices lie in a sedate office park in this suburban community 25 miles outside Philadelphia. More famed as the place where George Washington's encamped army survived a brutal winter, this is also home to the PJM Interconnection, whose primary function is to act as the air traffic controllers of power for electricity providers in Maryland, Washington, D.C., and all or parts of 12 other states.

Let the market set our energy prices Right now, here in Maryland, we are witnessing the very worst politicians have to offer with regard to the potential rise in electricity costs ("Utility, legislators not close on rates," April 4). It all began seven years ago when the legislature, for good reason, decided that, to attract new energy producers into the state, the industry needed to be deregulated. The only problem was that it wasn't really deregulated. The mandated price controls the legislation included undercut its intent.

The electric deregulation juggernaut that swept the nation in the late 1990s has been replaced by a consumer backlash against energy price increases that threatens to reverse free-market reforms. Lawmakers from Maryland to Montana worry that the deregulation movement they once embraced has failed to deliver the benefits they promised to constituents. About a third of the 23 states that passed restructuring laws have revisited or delayed those plans, and some - including New Mexico, Arkansas and Nevada - have passed legislation repealing deregulation laws.

The Sun's coverage of Baltimore Gas and Electric's looming 72 percent rate increase has become focused on the political ramifications of this huge regional story. Not surprisingly, both Democrats and Republicans have emphasized the other's shortcomings. Reactions from readers have become more strident. Dan Rodricks' recent columns have revisited the 1999 Maryland General Assembly, which passed the deregulation legislation that has helped create the crisis that 1.2 million BGE consumers now face.

A friend who works for BGE -- a man in a van who responds to gas leaks and downed electrical lines -- says, "The customers are not happy." He and his house-calling co-workers, the real frontline guys for BGE, have been catching flak about the large, looming electric bill increases, though they had nothing to do with it. Apparently, the flak has been heavy in spots. We got an e-mail from inside Constellation Energy, BGE's holding company, asking for relief for the guys in the field. (The plea came from a Constellation employee who works in personnel services but asked not to be identified by name.

With a 72 percent electricity price increase from Baltimore Gas and Electric a few months away, Scott Sweeney is preparing the same way as many Marylanders: by doing nothing. "I'm taking a sit back, wait-and-see attitude," he said. "I know it's coming, but I'm not going to worry too much about it until it hits me." But even then, with an annual bill estimated to be $743 higher on average than usual, the radio station advertising salesman doubts he will change his habits much. "As consumers, it just sounds like there's really nothing we can do about it," Sweeney said.

I wonder if the power is with them. Power-industry lobbyist Carville Collins and Public Service Commission Chairman Ken Schisler know about cell phones. All the kids do. For modern communicating, e-mail is, like, so lame - and it leaves a trail that can be embarrassing. So do IMs. (That stands for Instant Messages, you geeze!) Cell calls are much cleaner. If I'm a Republican lobbyist trying to deftly influence high-ranking state officials on, say, the deregulation of the electricity market in central Maryland, I'm making a call on my cell.

No matter what happens in the Maryland legislature, household electricity rates are bound to soar this summer. It's only a question of how high. Businesses, however, have been dealing with this deregulated electricity market for more than a year. Few if any companies have been nailed with the 72 percent increase that residential customers face. But the way that corporations have responded, by a combination of deal-shopping and lower consumption, gives a preview of what many households will be doing from now on. It shows that they're not completely powerless in the brave new electricity world.