- The Washington Times - Wednesday, April 12, 2006

ANNAPOLIS — Gov. Robert L. Ehrlich Jr. yesterday said Baltimore Gas and Electric Co. will not escape paying for cuts to its skyrocketing bills since the legislature adjourned without completing a rate-reduction deal.

“If they had that thought, I disabused them of that thought,” Mr. Ehrlich said. “I just made it very clear to [BGE] that the general framework we left had to be the beginning point [of new talks].”

The governor, a Republican seeking re-election, said he had been working “around the clock” negotiating a new rate-reduction plan since the Democrat-controlled General Assembly killed a deal that included $600 million to be paid by BGE to cut residential electric rates over 10 years.

“Whether it’s 60 [million dollars a year] or something approximating 60 still remains to be seen,” Mr. Ehrlich said at a State House press conference.

Robert L. Gould, communications director for Constellation Energy Group, BGE’s parent company, declined to discuss the utility’s willingness to spend millions of dollars on rate relief.

However, Mr. Gould said the absence of legislation for a low-interest, state-secured loan to offset rate cuts makes it more difficult for the power company to put cash on the table.

“We have to be realistic,” he said.

Mr. Ehrlich said he had not decided whether to call a special session of the General Assembly to try for a legislative solution to Maryland’s electricity crisis.

“We are looking outside the box,” he said, declining to give specifics. “There were certain options, certain approaches that were additionally discussed but were not blessed, were not adopted by the [legislature’s] membership.”

The power company is set to increase electric bills 72 percent for its 1.1 million residential customers starting July 1.

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 BGE’s rate caps expire.

Under a plan by the utility-regulating Public Service Commission (PSC), the higher charges phase in with a 21 percent increase July 1, followed by a 36 percent increase this fall and a further increase next year to reach market prices.

BGE customers also would pay a 5 percent interest charge for the deferred payments, unless they opt out and start paying the 72 percent rate increase in July.

The plan that died Monday night in the Senate would have phased in the market-level electricity rates, starting with a 15 percent increase in July. It also would have cut the 39 percent increase in electricity rates by Potomac Electric Power Co. and a 35 percent rate increase by Delmarva Power.

Since higher electricity rates were announced March 7, staving off “rate shock” has been the hottest issue this year in which every seat in the General Assembly is open in November’s elections.

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