- The Washington Times - Tuesday, May 16, 2006

ANNAPOLIS (AP) — The legislature’s top two officers, saying they have been stonewalled by utility company executives, renewed efforts yesterday to obtain more information about electricity rate increases from Constellation Energy Group and its subsidiary, Baltimore Gas and Electric Co.

The information is needed to determine whether the average rate increase of 72 percent for BGE’s 1.1 million residential customers is justified, House Speaker Michael E. Busch and Senate President Thomas V. Mike Miller Jr. said.

“These questions were asked over and over again” during negotiations last month, but the companies would not supply the information, said Mr. Miller, Prince George’s Democrat.

The two leaders said that if utility companies don’t respond to the request, they may use the legislature’s subpoena powers to force disclosure of the information.

Letters sent to Mayo A. Shattuck, Constellation’s chairman, president and chief executive officer, and BGE President Kenneth W. DeFontes touched on two sensitive issues, including compensation to executives of the two companies if the proposed $11 billion merger between Constellation and Florida utility FPL Group is completed.

Mr. Miller said it would be “political dynamite” if residential customers who are paying big increases in electricity rates learn that executives of the two companies are earning tens of millions of dollars from the merger.

The two leaders also want to know how much BGE will pay Constellation, its parent company, for the electricity that it buys from Constellation and then sells to customers.

Rob Gould, spokesman for the two companies, said the letter was received and was being reviewed.

“As was the case throughout the recently concluded legislative session, we will try to cooperate fully where possible,” Mr. Gould said.

Henry Fawell, a spokesman for Gov. Robert L. Ehrlich Jr., a Republican, said the letter was “yet another diversionary tactic” by Democratic leaders.

“Since they didn’t solve their own problem, they will at least try to change the subject,” Mr. Fawell said. “The legislature had seven years to fix this, and they refused to do it.”

Electricity rates for BGE residential customers have remained unchanged since 1999, when Democratic leaders included a rate freeze as part of a law ending state regulation of electric utility companies. The cap expires for BGE customers July 1.

The Public Service Commission (PSC) has approved a plan that will allow customers to phase in the rate increase, beginning with a 15 percent increase July 1. But customers will be assessed a surcharge on their monthly bills to pay back the amount they defer.

Mr. Busch and Mr. Miller think the PSC is shirking its job to protect consumers, and said the legislature still might be called into special session to deal with the rate increase.

“Obviously, there is no confidence in the PSC,” said Mr. Busch, Anne Arundel County Democrat. “The PSC should demand this information right now.”

Mr. Miller and Mr. Busch said information on executive compensation is important because any benefits from the merger of Constellation and FPL Group should be used to reduce rates and not to line the pockets of executives who arranged the merger.

Constellation said if the merger is completed, the company will use $60 million a year in savings for 10 years to reduce residential utility bills.

The plan negotiated between Mr. Ehrlich and the utility company to allow customers to defer part of the rate increase has been put on hold while a Circuit Court judge considers a lawsuit filed by Baltimore to require the PSC to reconsider the proposed rate increase. The commission has asked the state Court of Appeals to dismiss the lawsuit.


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