- The Washington Times - Monday, June 19, 2006

ANNAPOLIS — State lawmakers say the Democrat-controlled legislature’s new authority to appoint the utility-regulating Public Service Commission (PSC) will be used to select former commissioners who oversaw the 1999 partial deregulation of the industry.

A massive increase in electricity rates, which the General Assembly postponed in last week’s special session, resulted in part from the imminent expiration of rate caps placed by the 1999 deregulation laws.

Catherine I. Riley, former chairman of the utility-regulating agency, and Michael J. Travieso, former head of the Office of the People’s Counsel that represents consumer interest before the PSC, top the list of appointees to be named to the PSC by legislative leaders, lawmakers say.

Mr. Travieso and Mrs. Riley, who served on the PSC under Gov. Parris N. Glendening, a Democrat, set the price caps when implementing the 1999 deregulation laws. The caps were to expire July 1 and trigger a 72 percent rate increase by Baltimore Gas & Electric Co. (BGE).

Mrs. Riley and Mr. Travieso also were parties to the 1999 deregulation deal that made customers pay BGE about $530 million for the loss of value of its power plants. The losses, known as stranded costs, never materialized. The plants gained value.

Senate President Thomas V. Mike Miller Jr., Prince George’s County Democrat, and House Speaker Michael E. Busch, Anne Arundel County Democrat, will pick new commission members in accordance with the energy legislation adopted last week in a special session.

The legislation mandates that the current commission — four of the five members were appointed by Gov. Robert L. Ehrlich Jr., a Republican — will be fired July 1 and replaced with members whom Mr. Ehrlich picks from list of candidates named by Mr. Miller and Mr. Busch.

“It is ironic but disappointing that Mike Miller, the chief architect of the deregulation debacle, would recycle the same individuals who rubber-stamped this mess in the first place,” said Ehrlich spokesman Henry P. Fawell.

Mrs. Riley and Mr. Travieso could not be reached over the weekend.

Earlier this year, Mrs. Riley told the Baltimore Sun that the rate caps did not cause the energy crisis. She blamed inaction by the current PSC as the rate caps expire.

Mr. Ehrlich, who is seeking re-election this fall, says Democrats blame the current commission for the massive rate increases to deflect blame from the 1999 deregulation laws that Mr. Miller shepherded through the legislature and Mr. Glendening signed..

Senate Minority Leader J. Lowell Stoltzfus, Eastern Shore Republican, said the PSC takeover is a “political vendetta.”

He said the Senate president and other prominent Democrats want to retaliate against Mr. Ehrlich who, when he took office in 2003, fired Mrs. Riley, Mr. Travieso and former PSC member J. Joseph “Max” Curran III, son of longtime Maryland Attorney General J. Joseph Curran Jr. and brother-in-law of Democratic gubernatorial hopeful Baltimore Mayor Martin O’Malley.

Mr. Miller did not return a call seeking comment.

State Sen. Thomas M. Middleton, Finance Committee chairman who named Mrs. Riley and Mr. Travieso as top candidates for the new commission, defended the decision to keep utility rates below market level for years while global energy prices climbed higher.

“At the time when we deregulated, everybody thought caps was a good idea,” the Charles County Democrat said. “Hindsight is always 20/20.”

Mr. Middleton said the caps were not necessarily a bad idea because Marylanders have saved money by paying less than market energy prices up until now.

Delegate Dereck E. Davis, Prince George’s County Democrat and chairman of the Economic Matters Committee, said rate caps contributed to the energy crisis but approving the rate caps shouldn’t disqualify Mrs. Riley and Mr. Travieso from serving on the commission.

“Obviously, they have a wealth of experience and a wealth of knowledge,” he said. “If you want to hold anyone accountable, it’s [the legislators] who made that decision.”

The two chairmen said the nominee list also includes current commission members Allen M. Freifeld, an Ehrlich appointee and the first PSC staff member appointed to the commission, and Harold D. Williams, a former BGE executive who was appointed by Mr. Glendening.

In addition to the PSC takeover, Mr. Ehrlich has criticized the Democrats’ plan to partially re-regulate utilities and postpone BGE’s 72 percent rate increase because he says it saddles consumers with debt and interest payments.

The governor will hold a veto hearing tomorrow at 3 p.m. at the State House to highlight the plan’s deficiencies and hear public comments.

Mr. Ehrlich, who wrote an earlier energy plan that died in the regular General Assembly and one that was killed with a lawsuit by Mr. O’Malley, is expected to veto the bill and force Democrats to override his action, said a state official close to the governor’s veto deliberations.

Other provisions of the Democrats’ energy plan are an extension of caps on BGE’s rates for 11 months after a 15 percent increase July 1.

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