- The Washington Times - Tuesday, April 11, 2006

ANNAPOLIS — Gov. Robert L. Ehrlich Jr. said yesterday that the “framework is in place” for a deal between lawmakers and Baltimore Gas and Electric Co. (BGE) to reduce a 72 percent increase in consumer electricity rates this summer.

The bill, however, died on a procedural vote in the Senate just minutes the General Assembly adjourned at midnight.

It passed the House of Delegates on a 128-9 vote with two abstentions.

The next move is up to the governor and the Public Service Commission, which previously proposed an initial increase of 21 percent in July for BGE’s 1.1 million customers.

At adjournment, it was not clear whether the governor would call a special session or tackle the issue without the legislature.

“We are 90 percent there on this issue,” Mr. Ehrlich said earlier in the evening during a break from a third round of rate-reduction talks between state officials and BGE executives.

The governor’s comments — his most upbeat since the massive increase in electric rates was announced March 7 — gave hope that the standoff between the Democrat-controlled General Assembly and BGE could be resolved.

It didn’t happen.

The Senate Finance Committee had approved the deal in a 7-4 vote 90 minutes earlier.

Several senators appeared to have been turned around from their opposition to the deal.

“I voted for it, but I have misgivings still for the bill,” said Sen. Nathaniel Exum, Prince George’s Democrat.

“A great result was probably never in our grasp. We have made a bad deal better,” Mr. Ehrlich said.

The 22-page bill would have given the Public Service Commission, which regulates utilities, authority to set phase-in schedules for electricity-rate increases higher than 20 percent in any single year.

It also stipulates how power companies can recover the cost of phased-in rates from consumers.

The rate charged in 2008 would be somewhat lower than the 72 percent increase originally scheduled for this summer because of $600 million the company would return to customers as credits on their electric bills.

According to the bill, the credits would be paid over 10 years with customers receiving $60 million per year.

However, the bill provides that the credits would not be paid if Constellation Energy Group, which is BGE’s parent company, does not consummate its merger with Florida Power & Light by December.

BGE also could recover the cost of the phased-in rate increase by charging customers, but cannot begin to do so until January.

The costs would be recovered over a period not to exceed 10 years and would be paid by customers in proportion to the amount of electricity they use.

The commission would be required to establish a ratepayer-financed fund to help poor residents pay electric bills.

Electric customers earning less than 175 percent of the federal poverty level would qualify for assistance.

The fund must contain $37 million a year, with $27.4 million collected from industrial and commercial customers and $9.6 million collected from residential customers, according to the draft.

Mr. Ehrlich said the agreement would include provisions to lower electricity-rate increases of other power companies, including a 39 percent increase by Potomac Electric Power Co. and a 35 percent increase by Delmarva Power.

Part of the breakthrough to a deal, the governor said, was afternoon whip counts in both chambers that indicated there was enough support to pass legislation to seal the deal and enough votes to stop legislation that has been objectionable to BGE executives.

The General Assembly had been prepared to override Mr. Ehrlich’s vetoes of three bills that power company executives deemed “deal breakers.”

The votes never came.

The bills would have blocked an $11 billion merger of Constellation Energy Group with Florida Power & Light; forced BGE to return $528 million it collected from customers as part of the deregulation deal; and replace the Public Service Commission with one appointed by legislative leaders.

The bills, if enacted, likely would have spurred a power company lawsuit against the state, ended rate-reduction talks and accelerated higher energy rates.

Earlier in the day, Constellation Energy spokesman Robert L. Gould said the company needed assurances from lawmakers that further regulatory measures would not be imposed against their business after reaching a rate-reduction deal.

He said the company needed “certainty” about the future regulatory landscape in Maryland.

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