- The Washington Times - Thursday, June 15, 2006

Maryland Gov. Robert L. Ehrlich Jr. yesterday said he will hold a public “veto hearing” next week to expose deficiencies in the Democrats’ energy bill passed overnight Wednesday during a special session of the legislature.

“I want everybody to know what was done here,” Mr. Ehrlich told The Washington Times. “I want to make this [bill] as transparent as possible, put as much information out to the public as possible.”

Mr. Ehrlich, a Republican seeking re-election in November, said that the Democrats’ plan to partially re-regulate utilities and postpone a 72 percent rate increase by Baltimore Gas and Electric Co. (BGE) also saddles consumers with debt and interest payments.

The energy plan would extend a cap on BGE’s rates for 11 months after a 15 percent increase July 1.

It also would allow Democratic leaders to fire the members of the utility-regulating Public Service Commission (PSC) and select new commissioners.

Lawmakers have blamed the PSC’s five members — four of whom were appointed by Mr. Ehrlich — for approving BGE’s 72 percent rate increase due to take effect July 1.

The bill also imposes conditions on an $11 billion merger of Constellation Energy Group, BGE’s parent company, and Florida utility FPL Group Inc.

Under the bill, BGE rates would reach market-level prices in January 2008.

However, the bill would allow the new PSC to stave off market rates again next June by devising yet another rate-mitigation plan. Customers could chose whether to “opt in” to that plan.

BGE’s 1.1 million residential customers would be enrolled automatically in the plan and eventually will pay the higher market prices for electricity while also making payments for deferred charges in $2.19 monthly installments for 10 years — a total of $263.

However, the $2.83 in monthly fees now contained in BGE statements would be cut.

Critics call the bill a “quick fix” similar to 1999 deregulation laws that set the stage for the current energy crisis. Those laws, pushed by legislative leaders and signed by former Gov. Parris N. Glendening, a Democrat, capped rates below market levels as global energy prices rose.

“It’s hard to defend,” Mr. Ehrlich said yesterday.

Mr. Ehrlich, who authored an earlier energy plan that died in the regular General Assembly and one that was killed with a lawsuit by a political rival, said he expected many provisions in the Democrats’ bill to face court challenges. He did not elaborate as to which provisions he thought were suspect.

The bill passed both chambers of the Democrat-controlled legislature in near party-line votes with veto-proof majorities, yet Mr. Ehrlich is expected to veto the bill and force Democrats to override his action, said a state official close to the governor’s veto deliberations.

House Majority Leader Kumar P. Barve, Montgomery County Democrat, said he welcomed a public hearing on the plan.

“I think it is a great opportunity for [the governor] to hear from the public that they prefer a 15 percent to a 72 percent increase.”

Speaking yesterday to senior citizens at the Charlestown retirement community in Baltimore County, Mr. Ehrlich said it was a deal lawmakers struck “after midnight.” He stressed that unlike with his plans that let ratepayers “opt in” or “opt out,” consumers would be forced to participate.

“You’ll be paying interest for 10 years, and you don’t have a choice,” he told the crowd of about 200 retirees.

Constellation Energy Group spokesman Robert L. Gould declined to discuss possible litigation, but said company attorneys were reviewing the bill to gauge its effect on their customers.

“There are certainly aspects of the deal that we don’t agree with, but we are pleased for our customers that a rate-stabilization plan passed the legislature,” he said.

The PSC is contemplating a lawsuit, said spokeswoman Christine Nizer. “It hasn’t been ruled out.”

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