- The Washington Times - Wednesday, May 31, 2006

BALTIMORE — State lawmakers are skeptical that Mayor Martin O’Malley’s court victory in striking down Gov. Robert L. Ehrlich Jr.’s energy plan will prevent a 72 percent rate increase by Baltimore Gas and Electric Co.

“The celebration is premature and the claim of victory is overblown,” said Delegate Jill P. Carter, Baltimore Democrat. “At this point, the 72 percent [increase] is still on the table.”

Baltimore Circuit Court Judge Albert J. Matricciani Jr. ruled Tuesday in favor of Mr. O’Malley’s challenge of the governor’s plan to phase in the increase to market-based rates for BGE, which has had its rates capped below market prices for the past six years.

The judge’s order does not guarantee that BGE rates will not climb by 72 percent — the market-level price determined at a wholesale energy auction earlier this year that would boost the average utility bill by about $700 a year.

Miss Carter, a frequent critic of the mayor, said that without producing rate relief, the lawsuit looks like “political posturing” by Mr. O’Malley, a Democratic candidate for governor.

Senate Minority Whip Andrew P. Harris, Baltimore County Republican, said the mayor risks going from hero to scourge if the utility-regulating Public Service Commission (PSC) can’t come up with a better deal than the one by Mr. Ehrlich, a Republican seeking re-election.

Under Mr. Ehrlich’s plan, which was negotiated in April, consumers could see rates go up more than the 19 percent starting July 1, with an additional 25 percent boost due June 1, 2007, and a transition to market rates by January 2008.

Mr. O’Malley has vaguely promised lower energy rates, but PSC officials and power company executives warn that the court action could lead to even higher prices.

“You have to be careful what you wish for because sometimes you get it,” Mr. Harris said of the mayor’s lawsuit. “If the rates go up [beyond 72 percent], the mayor will have to answer for that.”

However, Towson University political science professor Richard E. Vatz said Mr. O’Malley can score political points regardless of whether BGE’s rates go up.

“I think the average Marylander looking at this sees Mayor O’Malley fighting for lower rates and the PSC rubber-stamping rate increases,” said Mr. Vatz, an Ehrlich supporter.

The professor said Mr. O’Malley can capitalize on any outcome. He can present himself as the hero if rates go down, say that at least he fought for lower rates if they stay the same or assert that the PSC acted punitively if rates end up topping 72 percent.

“As a symbolic action and political action, this is probably a net gain for the mayor,” Mr. Vatz said. “Do I think this is the end of the race for governor? No. There is a tough primary and a tough general election still to come.”

Mr. O’Malley’s chief rival in the Democratic primary is Montgomery County Executive Douglas M. Duncan, who has called for returning Maryland to a fully regulated utility to combat skyrocketing energy prices.

The rate caps that expire July 1 set the stage for the energy crisis. They were part of the 1999 deregulation laws passed by the Democratic-controlled legislature and signed by Gov. Parris N. Glendening, a Democrat.

Judge Matricciani, a Democratic appointee who presided over the deregulation case, also directed the commission Tuesday to hold public hearings to examines BGE’s business dealings, including the proposed $11 billion merger of Constellation Energy Group, which is BGE’s parent company, and Florida utility FPL Group Inc.

The merger reportedly has been put on hold because of uncertainty about Maryland’s political and regulatory environment.

The decision may reinvigorate the stalled push by the legislature’s black caucus for a special session to address the situation.

The caucus has proposed firing the five PSC members, four of whom are Ehrlich appointees, and replacing them with members picked by leaders of the Democratic-controlled legislature.


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