- The Washington Times - Monday, June 5, 2006

Maryland Gov. Robert L. Ehrlich Jr. yesterday said he will call for a special General Assembly session to revive a plan to phase in a massive electricity rate increase that died when the Democrat-controlled legislature adjourned in April.

Mr. Ehrlich, a Republican seeking re-election, said a special session is necessary because a lawsuit filed by Baltimore Mayor Martin O’Malley voided the governor’s plan to phase in a 72 percent increase in the energy bills of Baltimore Gas & Electric Co.’s (BGE) 1.1 million residential customers.

“I urge you to join me in undoing the consequences of the city’s lawsuit by enacting the rate stabilization plan we negotiated together in the closing weeks of the session,” Mr. Ehrlich said in a letter late yesterday to Senate President Thomas V. Mike Miller Jr. and House Speaker Michael E. Busch, both Democrats.

“This plan has already won overwhelming bipartisan support in the House and deserves the same consideration in the Senate,” Mr. Ehrlich said. “If we are to regain the ground lost because of the City’s lawsuit, it must be done in bipartisan fashion and without delay.”

The governor did not set a date for the special session, but the rate increase is scheduled to begin July 1.

“Time is not on our side, however,” Mr. Ehrlich said in his letter. “The higher costs of electricity — and the anti-consumer plan adopted in the wake of the City’s lawsuit — will confront BGE’s residential customers in just four weeks, causing undue financial hardship for many Marylanders.”

Mr. Miller and Mr. Busch were not available for comment about the governor’s call for a special session but, earlier yesterday, announced plans to discuss the issue at a meeting today.

The lawsuit brought by Mr. O’Malley, a Democrat running for governor, challenged a plan negotiated by Mr. Ehrlich and approved by the Public Service Commission. That plan sought to soften the rate increase by offering customers a 19 percent increase next month and gradually higher rates later.

Baltimore Circuit Judge Albert J. Matricciani Jr. ruled May 30 that the plan did not guarantee a smaller rate increase.

His decision prompted the commission to impose an outdated rate plan that starts a two-year phase-in with a 21 percent increase and charges customers 5 percent interest monthly on the deferred payments.

More than 9,000 customers called BGE’s hot line (888/234-0505) within its first three hours of operation yesterday to “opt out” of the plan, said Robert L. Gould, spokesman for BGE and the utility’s parent company, Constellation Energy Group.

Customers who do not opt out will automatically be in the plan.

BGE customers who logged onto the company’s Web site (www.bge.com) got a blunt warning that if they delay the full impact of the increase, they will pay more money in the long run.

Mr. Gould said the company is not advising customers what they should do, saying, “It’s a matter of personal choice.”

Mr. Ehrlich called the situation an “untenable situation caused by Baltimore City’s lawsuit.”

The plan he aims to revive would phase in the increase to market-based rates over 18 months, beginning with a 15 percent increase July 1.

It includes a commitment by Constellation Energy to cut customers’ bills by $600 million over 10 years, which would reduce the average monthly bill by about $3.

When that plan died in the Senate on the last day of the session, Mr. Ehrlich brokered a similar deal with BGE that cost customers slightly more money but still included the $600 million in rate cuts.

Mr. O’Malley said he supported a special session if the legislature would take up a Democratic plan to replace the governor-appointed Public Service Commission with members selected by legislative leaders.

“I think we should have a special session if only to replace the Public Service Commission for their miserable failure to serve the public and do their duty,” Mr. O’Malley said.

The increase in BGE rates has resulted, in part, from the 1999 deregulation laws passed by the Democrat-controlled legislature and signed by Gov. Parris N. Glendening, a Democrat. The laws capped rates below market levels while prices gradually rose.

Worldwide demand, especially in developing economies of China and India, and Hurricane Katrina’s disruption to U.S. energy supplies also pushed prices higher as BGE’s caps expired.

In calling for a special session, Mr. Ehrlich risks a repeat of last year’s reform of the state’s medical-malpractice laws. Democrats abandoned his plan and passed laws opposed by the administration, including a tax on health maintenance organization premiums.

Mr. Miller and Mr. Busch have blamed the rate increase on the four commission members appointed by Mr. Ehrlich.

Mr. Miller has said one of the options that would be considered at a special session would be replacing a commission “that doesn’t have the interests of many consumers at heart” with new members who would look out for customers.

“The governor is hoping that lawmakers will recognize that pointing fingers does not keep electricity affordable,” Ehrlich spokesman Henry Fawell said. “Only bipartisan, specific and credible efforts will keep electricity affordable.”

• This article is based in part on wire service reports.


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