Baltimore seeks cap extension

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BALTIMORE (AP) -- City officials plan to ask the Maryland Public Service Commission (PSC) today to extend caps on Baltimore Gas and Electric Co.'s (BGE) electricity rates after a judge ruled that the commission could take that action.

Baltimore Circuit Judge Albert J. Matricciani Jr. said in a ruling made public Friday that the PSC overreacted earlier this month when it rejected as unconstitutional his suggestion of extending rate caps.

Judge Matricciani first said that keeping limits on rates would be an option in a recent decision that sided with the city in a lawsuit challenging the validity of a rate-relief plan negotiated by Gov. Robert L. Ehrlich Jr., a Republican seeking re-election.

City Solicitor Ralph S. Tyler said he intends to argue before the PSC today in favor of extending the rate caps.

If he succeeds, Constellation Energy Group, BGE's parent company, would be barred temporarily from imposing the rate increase on July 1 as planned.

The hearing today had been designed to set a schedule for more proceedings in a rate-relief case.

But the city of Baltimore, the Office of the People's Counsel and others plan to use it to argue for more consumer protections.

"The judge made clear that he expects the PSC at the hearing [today] to take seriously his order that it does have the authority to extend the rate caps," Mr. Tyler said.

In his Thursday order, Judge Matricciani wrote: "The court offered the practical suggestion of resolving the complex issues remaining before the commission before imposing a dramatic rate hike on BGE's residential customers. This course of action, while never [discussed] before the Court, did not seem to it to have the dire constitutional and doctrinal implications ascribed to it by the PSC."

Mr. Ehrlich said Saturday that a temporary extension of the rate cap ultimately would hurt BGE customers. He said Judge Matricciani's ruling affirmed that BGE was fully entitled to recoup the cost of electricity plus a reasonable rate of return.

"People are going to end up paying more in the long run" if the rate cap is extended, Mr. Ehrlich said on the WBAL-AM (1090) "Stateline" program.

PSC spokeswoman Christine Nizer agreed that there would be no real benefit to consumers in extending the caps.

"It's kind of a pay now or pay later distinction," she said. "There has been a sense that if you extend the rate caps that somehow [the increase] goes away. The judge's ruling confirmed that's not the case."

The judge said he intended for the PSC to allow BGE to collect the difference from customers from the period between July 1 and the adoption of a new rate-stabilization plan.

BGE rates have been capped since shortly after the Democrat-controlled General Assembly enacted a deregulation law in 1999.

The PSC imposed the caps with the expectation that competition would develop as the state moved toward a free-market electric industry. Instead, energy prices have soared as a result of Middle East unrest, natural disasters and increased demand.

Lawmakers are preparing to return to Annapolis this week for a special session intended to pass a new rate-relief plan, and Democratic leaders are working on legislation to replace the PSC.

Consumer advocates from the Maryland Public Interest Research Group, Common Cause, the Maryland Consumer Rights Coalition and the Association for Community Oriented Reform Now said they plan to deliver a giant pink slip to the PSC headquarters to demonstrate their desire that the commissioners be replaced.

Mr. Ehrlich has said the effort to replace the PSC is a transparent attempt by Democrats to shift blame to Republicans for the rising rates.