- The Washington Times - Thursday, June 15, 2006

ANNAPOLIS — The state Senate last evening approved in a special session an energy plan that would restore regulation to Maryland’s utility industry and postpone a 72 percent rate increase by Baltimore Gas and Electric Co. until after elections this fall.

The House late last night was preparing to adopt the 60-page bill that was drafted by leaders of the Democrat-controlled legislature.

But Gov. Robert L. Ehrlich Jr., a Republican seeking re-election this fall, decided last night to veto the energy plan, bucking top advisers who warned against the move, according to a state official close to the deliberations.

Under state law, Mr. Ehrlich has six days to either veto the bill, sign it or let it become law without his signature.

Democrats, who outnumber Republicans more than 2-to-1 in both chambers, likely would return next week to override the veto.

The governor told reporters earlier in the day that the Democrats’ proposals might force him to use the veto and then explain to voters that the plan had been a bad deal for them.

Mr. Ehrlich is planning a TV ad campaign to get out his message that the plan risks bankrupting the power company and driving energy prices even higher, the official said.

The Senate approved the bill on a vote of 36-11, with three of the Senate’s 14 Republicans supporting the measure.

“This is a big step into a regulated environment,” Sen. Thomas M. Middleton, Charles Democrat and chairman of the Finance Committee that handled the bill, said on the Senate floor. “We are moving back.”

The three Republicans were Sens. E.J. Pipkin of the Eastern Shore, Sandra B. Schrader of Howard County, and J. Robert Hooper of Harford County.

Meanwhile, Democratic leaders relaxed opposition to a bill supported by the administration that would crack down on child molesters. The bill was moving toward passing in both chambers late last night.

The sex-offender bill — which included a provision for a 25-year mandatory minimum sentence for sex crimes against children — died during the regular session because of opposition from Democrats.

During debate of the energy plan, Republican senators protested provisions that would allow Democratic leaders to select the members of the utility-regulating Public Service Commission (PSC).

“This bill doesn’t do anything,” Senate Minority Leader J. Lowell Stoltzfus, Eastern Shore Republican. “We are still going to see 72 percent [rate increases].”

But Sen. Lisa A. Gladden, Baltimore Democrat, said restructuring the PSC gave “real hope for rate relief.”

The plan would extend a cap on BGE’s rates for 11 months after a 15 percent increase July 1. It also would expand PSC authority to regulate power companies, dictate operations of power plants and set energy prices

BGE rates will reach market-level prices in January 2008, according to the bill.

Other provisions would impose conditions on a proposed $11 billion merger of Constellation Energy Group, BGE’s parent company, and Florida utility FPL Group, Inc.

Other critics say it is a “quick fix” similar to Maryland’s 1999 deregulation laws that set the stage for the current energy crisis. Those laws, pushed by legislative leaders and signed by Gov. Parris N. Glendening, a Democrat, capped rates below market levels while worldwide energy prices climbed higher.

BGE’s rate caps were to expire July 1, triggering a 72 percent increase to market prices.

“In ‘99, we were given pretty much the same scenario,” said Delegate Paul S. Stull, Frederick County Republican. “We were promised this and promised that. What is going to happen [now] after 11 months?”

Sen. Ulysses Currie, Prince George’s Democrat, said there is no guarantee BGE’s rates would not rise 72 percent to reach market prices in January 2008, as called for in the bill.

“They might go up that much.” said Mr. Currie, chairman of the Budget and Taxation Committee. “But where we are now it is imperative that we do something.”

The bill would allow the new PSC to stave off market rates again in June 2007 by devising yet another rate-mitigation plan, but customers could chose whether to “opt-in” to that plan.

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