- The Washington Times - Tuesday, May 30, 2006

BALTIMORE — Mayor Martin O’Malley yesterday won his court challenge of Gov. Robert L. Ehrlich Jr.’s phase-in plan of a 72 percent increase in Baltimore Gas and Electric Co. energy rates.

Baltimore Circuit Court Judge Albert J. Matricciani Jr. threw out the plan fashioned by Mr. Ehrlich, a Republican seeking re-election, and ordered the utility-regulating Public Service Commission (PSC) to come up with another plan.

“The Court does not believe that the Commission acted in the public interest or with fairness to customers in the face of a recently announced 72 percent residential rate increase,” Judge Matricciani wrote in the opinion.

Still, it was not clear whether Mr. O’Malley’s lawsuit would be able to stop the looming rate increase, which would gradually increase the average annual household utility bill by more than $700 by January 2008.

Mr. O’Malley, a Democratic candidate for governor, has vaguely promised lower energy rates, but commission officials and power company executives warn the court action could lead to even higher prices.

The court opinion echoed the argument presented by City Solicitor Ralph S. Tyler, who told the judge that the PSC failed to examine BGE’s business plans and neglected consumer interests when approving the rate increase.

“This commission doesn’t care about customers. This commission didn’t do anything for customers,” Mr. Tyler said.

Judge Matricciani said the commission denied the city “fundamental fairness of a due process hearing on all relevant facts and circumstances” when approving the rate mitigation plan April 27.

The plan would have phased in the increase to market-level rates across 18 months, beginning with a 19 percent increase July 1.

Mr. Ehrlich said the ruling had undermined the only “credible plan” yet to ease consumers into higher market-based energy prices when BGE’s 1999 rate caps expire.

“Without this rate relief plan, 1.2 million Marylanders could face overnight 72 percent price spikes July 1,” Mr. Ehrlich said.

The judge also granted the city’s request that the PSC hold public hearings at which the city and others can “cross-examine witnesses on all relevant facts and circumstances” of the rate plan.

The order opens the door to public scrutiny of BGE and its parent company, Constellation Energy Group, including the potential cost savings from Constellation Energy’s proposed merger with the Florida utility FPL Group Inc. that could be used to lower rates.

Mr. Ehrlich has characterized the lawsuit as a political stunt aimed at tapping voter anger regarding rising energy prices.

However, even some Republican campaign strategists say privately that Mr. O’Malley is scoring points.

“This is about law, not politics,” said O’Malley spokeswoman Raquel Guillory. “We are asking the judge to direct the PSC to correct this wrong and provide real relief to ratepayers.”

Mr. Ehrlich brokered the phase-in deal with BGE after the Democrat-controlled General Assembly adjourned last month without passing an energy plan.

Judge Matricciani granted the city’s request May 10 to bar BGE from publicizing the phase-in deal until the challenge was decided. The Court of Special Appeals upheld the ban in a May 19 ruling.

The decisions have buoyed Mr. O’Malley and other critics of the governor’s plan, many of whom have pushed for a General Assembly special session on energy rates.

The spike in energy rates is the result, in part, of deregulation laws passed in 1999 by the Democrat-controlled legislature and signed by Gov. Parris N. Glendening, a Democrat.

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