- The Washington Times - Tuesday, April 25, 2006

BALTIMORE — The chairman of the utility-regulating Maryland Public Service Commission says he is tired of politicians making him the “scapegoat” for the 72 percent increase in Baltimore Gas and Electric Co.’s residential energy prices.

“It’s pure skulduggery,” PSC Chairman Kenneth D. Schisler told The Washington Times. “The law says very explicitly that after the rate caps expire, the rates shall be at market-based rates.”

The chairman likely will remain a focus of Maryland’s energy debate as the commission considers a deal Gov. Robert L. Ehrlich Jr. brokered with BGE to phase in the higher electricity prices, beginning with a 19 percent increase in July.

A hearing on the plan is set for Thursday.

Meanwhile, BGE has begun a radio and newspaper advertising campaign to deflect criticism about the rate increase and to explain the phase-in plan.

BGE spokesman Rob Gould said the ads, which began running in central Maryland Sunday, remind customers about the world energy situation that led to the increased rates.

Last week, the PSC approved the administration’s deal with Potomac Electric Power Co. and Delmarva Power to phase in their large rate increases, beginning with 15 percent increases this summer.

The commission also is reviewing a proposed $11 billion merger of Constellation Energy Group, BGE’s parent company, with Florida utility FPL Group.

The merger remains key to the rate-relief deal.

A hearing on the merger scheduled for today was canceled in response to a postponement request by Public Citizen, Maryland Public Interest Research Group and several other consumer-advocacy groups.

The nonprofit groups said they needed more time to study the governor’s rate-relief plan and its implications for the merger before presenting their testimony.

“I am against tying the merger to the rate deal,” Public Citizen spokesman Tyson Slocum said. “It is not doing anything to address the underlying, systemic problems in Maryland’s utility market.”

The merger also was assailed yesterday by Delegate Pat McDonough, a Baltimore County Republican and vocal critic of the governor’s rate deal.

“I will not accept any plan that is connected to the merger,” Mr. McDonough said while guest-hosting a radio talk show on WCBM-AM (680). “That [deal] is what [Constellation Energy CEO] Mayo Shattuck wants. It’s not for consumers.”

Mr. McDonough is pressuring the governor, a fellow Republican who is seeking re-election, to call a special session of the Democrat-controlled General Assembly to address the energy crisis.

Mr. Ehrlich forged the deal with BGE to avoid an election-year special session after the legislature killed an earlier rate-reduction deal.

Democratic lawmakers blamed BGE’s rate increase on the PSC, which approved the utility’s request for higher rates earlier this year.

They also drew up legislation that would fire the PSC’s members and reconstitute the commission with members mostly chosen by legislative leaders. Mr. Schisler filed suit against the bill.

The issue became moot when the General Assembly did not override the governor’s veto of the PSC bill.

The five-member commission consists of Mr. Schisler, a former Republican delegate from the Eastern Shore and former minority whip in the House of Delegates; former BGE executive Harold D. Williams; former PSC staffer Allen M. Freifeld; former Assistant State’s Attorney Karen A. Smith; and Charles R. Boutin, a former Republican delegate from Harford County.

Mr. Ehrlich appointed all the members except Mr. Williams, who was appointed by Gov. Parris N. Glendening, a Democrat, in 2002.

Baltimore Mayor Martin O’Malley and Montgomery County Executive Douglas M. Duncan — both Democrats aiming to replace Mr. Ehrlich — accuse the commission of being too cozy with the utility industry.

State Senate President Thomas V. Mike Miller Jr., Prince George’s County Democrat, says the PSC could “undo” the rate increase if the governor wanted it.

Mr. Schisler said Maryland’s 1999 deregulation law prescribed a competitive bidding process among electricity suppliers to determine the rates. The commission was required to approve the lowest bid, which for BGE resulted in a 72 percent increase.

“It is not a subjective determination,” Mr. Schisler said. “Politicians like Mike Miller know that, but they need a scapegoat.”

Mr. Miller declined to respond.

The increase in electricity rates is the result, in part, of a 1999 deregulation plan that was shepherded through the legislature by Mr. Miller and signed by Mr. Glendening. The plan capped BGE rates for six years as market prices climbed higher.

Electricity prices also reached record levels due to increased worldwide demand for energy, especially in the emerging economies of China and India, and lingering damage to U.S. energy supply lines by Hurricane Katrina.

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