- The Washington Times - Wednesday, March 29, 2006

ANNAPOLIS — The Democrat-controlled Senate yesterday gave preliminary approval to a bill that would fire the five members of the utility-regulating Public Service Commission (PSC) for approving significant energy rate increases this summer.

“We don’t have any confidence in the Public Service Commission,” said Senate President Thomas V. Mike Miller Jr., Prince George’s County Democrat. “They have shown that they’re completely and totally aligned with the utility companies.”

Mr. Miller said PSC Chairman Kenneth D. Schisler made a “horrible mistake” by allowing Baltimore Gas & Electric Co. (BGE) to raise its rates by 72 percent, Potomac Electric Power Co. (Pepco) by 39 percent and Delmarva Power by 35 percent.

The Senate president said the PSC “did not cause” the energy-rate crisis, but it has “done absolutely nothing to alleviate the crisis.”

Gov. Robert L. Ehrlich Jr., a Republican who has appointed four of the five PSC commissioners, yesterday said, “If the same folks who brought you this situation want to control the Public Service Commission, let them have it.”

Mr. Ehrlich, who is seeking re-election, has criticized lawmakers’ threats to address the rate increases by interfering in an $11 billion merger between Florida Power & Light and Constellation Energy Group, BGE’s parent company.

Power company executives have vowed to sue if the state interferes with the merger and have noted that Moody’s Investor Service has put Constellation on a watch list because of uncertainty about Maryland’s regulatory environment.

Mr. Schisler, the PSC chairman, issued a three-sentence statement:

“The Maryland General Assembly created the Public Service Commission in 1910, and the Maryland Senate voted today to dismantle and then reconstitute the Commission. This legislation does nothing to address the upcoming looming rate increase facing consumers. It is my hope that the members of the General Assembly and the governor will be able to focus on reaching a bipartisan solution to help Maryland consumers with this very serious problem.”

The rate increases are partly the result of a 1999 deregulation plan approved by the Democrat-controlled General Assembly and signed by Gov. Parris N. Glendening, a Democrat.

The plan included rate caps that kept electric bills artificially low for the past six years and discouraged competition from entering Maryland’s partially deregulated utility market.

The caps for BGE expire in July. The caps already have expired for Pepco and Delmarva Power.

Yesterday, Constellation executives made a new offer to soften the impact of the rate increase, but General Assembly leaders said they are seeking more help for BGE’s 1.1 million residential customers.

Top utility officials offered the new plan during a meeting with Mr. Ehrlich and key legislative leaders.

Constellation did not release details of the plan, but participants in the meeting said the value of the new offer is $354 million.

Under the new offer, BGE rates would go up 15 percent in July, 4.5 percent in January and 20 percent in the summer of 2007, with the rest of the 72 percent increase kicking in the following January.

Negotiations between state officials and utility executives are scheduled to resume tomorrow.

“We have now less than two weeks to go. There’s no reason in the world why this should not get done,” Mr. Ehrlich said, noting that the legislative session is scheduled to end April 10.

Meanwhile, the Senate is expected to schedule a final vote on its PSC bill soon. The bill would abolish the PSC, whose members are appointed by the governor, and reshape it with two members appointed by the Senate president, two by the House speaker and one by the governor.

After June, the PSC will have no authority to regulate energy rates because of the 1999 deregulation legislation.

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

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