- The Washington Times - Saturday, May 13, 2006

BALTIMORE — Gov. Robert L. Ehrlich Jr. and the chairman of the Maryland Public Service Commission said yesterday that a lawsuit filed by Baltimore city officials would have little effect other than to prevent Baltimore Gas and Electric Co. customers from learning about an option to defer part of a 72 percent electricity-rate increase.

The commission filed an emergency request Friday to the Maryland Court of Appeals, asking that the court reject the city’s lawsuit, which seeks to force state regulators to review the price increase.

Commission Chairman Kenneth Schisler said yesterday on WBAL-AM’s “Stateline with the Governor” program that the city’s lawsuit made “specious claims” about the process that led to the rate increase.

The electricity deregulation law passed in 1999, when Parris N. Glendening, a Democrat, was governor, requires that electricity be sold to Maryland consumers at market rates starting this July. Mr. Schisler said the 72 percent increase was established during competitive procurements conducted by utilities, with the commission’s oversight, over the last three years. Neither “the city nor anyone else has challenged these procurements,” said Mr. Schisler, an Ehrlich appointee. “The suit that the city is bringing has nothing to do with the 72 percent. It really has to do with politics.”

Baltimore Mayor Martin O’Malley is seeking the Democratic nomination to challenge Mr. Ehrlich, a Republican who’s running for re-election.

Raquel Guillory, an O’Malley spokeswoman, said the commission sold consumers short by failing to consider several factors — including the pending merger of BGE’s parent company, Constellation Energy Group, with FPL Group Inc. of Florida — before it settled on the size of the increase.

“If BGE stands to gain a substantial amount of money from the merger, that cost savings should be passed on to consumers,” she said.

Mr. Ehrlich implied yesterday that the merger would do just that, saying the rate increase would ultimately be “in the 60s” and not 72 percent.

The commission’s filing with the state’s highest court seeks the reversal of a lower court ruling that orders BGE to stop publicizing the electricity-rate deferral plan.

City officials contend they are questioning the need for such a large increase, not trying to quash the deferral plan.

The lawsuit asks for new commission hearings on the rate increase, a review of the merger and scrutiny of executive profits from the merger if it goes through.

Mr. Ehrlich and Mr. Schisler said the lawsuit would not result in a rate reduction because market forces determined the size of the increase. The governor said in the meantime, limited-income consumers were being denied the opportunity to learn about their option to phase in the new rates.

Mr. Ehrlich negotiated the rate deferral plan with Constellation executives after the Democrat-controlled General Assembly failed to legislate a mitigation plan for rate-payers. The Court of Appeals has given Baltimore officials until Thursday morning to file a response to the commission’s motion, City Solicitor Ralph Tyler said. A hearing on the city’s lawsuit is scheduled for May 30.

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