Moves on BGE, Wal-Mart bad for business

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Maryland officials are scaring off investment in the state with such anti-business moves as the court-ordered scrutiny of Baltimore Gas and Electric Co.'s energy rates and the law that forces Wal-Mart to pay employee health benefits, business leaders say.

"Wal-Mart yesterday. BGE today. Who's next?" asked William R. Burns, spokesman for the Maryland Chamber of Commerce, which represents about 850 businesses employing more than 340,000 people statewide.

He said companies are thinking twice about operating in Maryland after Baltimore Circuit Judge Albert J. Matricciani Jr. ordered the state's Public Service Commission to review the utility company's pending 72 percent rate increase and open its books for political leaders.

The lawsuit by Baltimore Mayor Martin O'Malley, a Democratic candidate for governor, also succeeded in voiding the energy plan of Gov. Robert L. Ehrlich Jr., a Republican seeking re-election.

The plan -- which Mr. Ehrlich brokered in April after the Democrat-controlled legislature adjourned without agreeing to any action -- gradually would have phased in the company's rate increase to market-based electricity prices when the 1999 rate caps expire July 1.

However, the order does not guarantee that the rate increases will be less than 72 percent, the market-level price that will increase the average utility bill by about $700 per year.

"It has had a negative impact on Maryland's business climate," Mr. Burns said.

Maryland Secretary of Business and Economic Development Aris Melissaratos, whose chief job is attracting companies to the state, said the judge's ruling was a "huge negative."

"I'm often asked why Baltimore does not have more [corporate] headquarters," he said. "This is the answer. It makes my job that much tougher."

Mr. Melissaratos also criticized calls by Mr. O'Malley and some state lawmakers to review compensation paid to Mayo Shattuck, president and chief executive officer of Constellation Energy Group, which is BGE's parent company, and financial details of a proposed $11 billion merger of Constellation Energy and Florida utility Florida Power and Light Co.

"That is not the realm of legislatures or courts," he said. "Frankly, there are regulatory bodies [such as the U.S. Federal Energy Regulatory Commission] set up to do those things."

The merger reportedly has been put on hold because of uncertainty about Maryland's political and regulatory environment.

The legislature's Democratic leaders also are perusing financial records that the company turned over last week to help determine whether to call a special session on rate relief.

Lawmakers have clamored for a special session to possibly force lower rates, replace the governor-appointed commission with members picked by legislative leaders or investigate the merger.

These ideas, after the legislature's passing of the Wal-Mart bill and a minimum-wage increase over Mr. Ehrlich's veto, have added to Maryland's bad-for-business reputation, said Richard A. Booth, a University of Maryland School of Law professor who specializes in business law and regulatory issues.

"That does suggest sort of a trend in Maryland that is probably not the best way to attract business," he said.

However, the professor praised the state's specialized business courts -- known as the Maryland Business and Technology Case-Management Program -- as a positive development for Maryland businesses.

Judge Matricciani has been the director of the program since 2001.