- The Washington Times - Thursday, April 13, 2006

ANNAPOLIS — The Ehrlich administration yesterday said it will hold talks with electricity executives during the Easter weekend and hopes to have a deal to mitigate price increases by early next week.

“The question is, can we still get down to reasonable electricity rates? I’m very optimistic that we can,” said Paul E. Schurick, communications director for Gov. Robert L. Ehrlich Jr., a Republican.

Electricity rates for Baltimore Gas and Electric Co. are set to go up a staggering 72 percent for its 1.1 million residential customers, beginning July 1.

The Democrat-controlled General Assembly killed a deal in the session’s last moments Monday that would have required BGE to pay $600 million over 10 years to minimize costs to consumers.

Mr. Ehrlich has been meeting with representatives from BGE and their parent company, Constellation Energy Group, all week, though no meetings were held yesterday.

Mr. Ehrlich said during an afternoon radio show that the state has lost leverage by not passing legislation that guaranteed BGE a low interest rate on a $600 million loan. Mr. Schurick, without giving specifics, said the governor is optimistic that a deal could be reached that would limit the rate increase to 15 percent this year, with future increases phased in over the next two years.

House Speaker Michael E. Busch, who has been angry that the Senate did not accept the House measure, was less optimistic.

“You cannot recreate what you had. You cannot recreate the moment,” said Mr. Busch, Anne Arundel Democrat.

Mr. Ehrlich still is considering calling the General Assembly back for a special session to resolve the crisis, spokesman Henry Fawell said, an idea endorsed by Montgomery County Executive Douglas M. Duncan, a Democrat who is running for governor.

Mr. Busch, however, said “the incentive for the governor to call us back is next to nothing.”

Robert L. Gould, Constellation’s spokesman, has said that the absence of legislation for a low-interest, state-secured loan to offset rate cuts does make it more difficult for the power company to put cash on the table.

Yesterday, he declined to comment on Mr. Schurick’s remarks.

“We have had dialogue with the governor and his staff … and we’re going to continue in hopes that we can resolve this,” Mr. Gould said. “We’re hopeful we can resolve this sooner rather than later.”

Mr. Busch said that if Senate President Thomas V. Mike Miller Jr. had known that the electricity deal was going to fail, the Senate should have overridden Mr. Ehrlich’s vetoes of three bills that would have retained some leverage for the state.

The three bills would have fired the five Maryland Public Service commissioners, blocked a merger between Constellation and Florida Power and Light Co. and secured the $600 million loan for Constellation.

“The only way you keep Constellation engaged is you override the vetoes,” Mr. Busch said.

The rate increase has resulted, in part, from a 1999 deregulation deal under Gov. Parris N. Glendening, a Democrat, that capped electricity rates below market levels for six years.

Worldwide demand for energy and Hurricane Katrina’s disruption of energy supplies also have driven electricity rates higher at the same time that BGE’s rate caps expire.

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