Baltimore Mayor Martin O'Malley wants Public Service Comm. head

Daily Record, The (Baltimore), Mar 14, 2006 by Kathleen Johnston Jarboe

Baltimore Mayor Martin O'Malley yesterday said state electricity regulators had failed to protect consumers against upcoming rate hikes and called on Gov. Robert L. Ehrlich Jr. to replace the regulatory agency's top official.[The Public Service Commission] should be standing up for consumers, not rolling over for corporate interests, O'Malley said.

He likened the regulatory agency to a lapdog for utility interests.Chairman Kenneth D. Schisler leads the five-member Public Service Commission that rules on utility matters. Schisler has been criticized for firing five top- level PSC staff in 2004 in a move that some said was politically motivated. A spokeswoman for the agency did not immediately return calls for comment.O'Malley said the firings crippled the PSC from better monitoring electricity rate developments. About 135 people work at the state agency. O'Malley's comments come as residential electricity ratepayers in Baltimore Gas & Electric Co. territory face 72 percent increases to their bills this July. Prices will rise 39 percent for Pepco customers in the Washington area and 35 percent for Delmarva Power and Light customers on the Eastern Shore in June.The higher spikes in BGE's area are due to the expiration of caps that had kept rates frozen from market pressures since the General Assembly passed deregulation in 1999. Since then, hurricanes, increased global demand and Middle East conflicts have pushed energy market prices to highs. Rate increases in Pepco and Delmarva territories are lower since customers there moved to market- based rates two years ago.O'Malley claimed the commission could have done more to protect residential customers against the unfolding deregulation plan. He said the PSC should have negotiated better rate cushions or should look for leverage for consumers as the regulatory body rules on a merger between BGE's parent Constellation Energy Group Inc. and a Florida power company.None of the current appointed commissioners sat on the board in 1999 when the PSC approved details concerning how the state would move from regulated markets to competitive markets. Each commissioner is appointed for a five-year term. O'Malley's brother-in-law, J. Joseph Curran III, served as a commissioner until last summer.But it is not uncommon for state regulators to protect ratepayers in merger approvals. This year Pennsylvania utility regulators negotiated $120 million in rate discounts and rate guarantees through 2010 in the merger of energy companies Exelon Corp. and Public Service Enterprise Group Inc.At the request of Ehrlich, state regulators have moved to cushion BGE rates partially. Last week, they passed a plan that would delay some of the initial rate hikes through February 2007. But customers would pay more than market rates from March 2007 through May 2008 and would pay 5 percent interest for the deferment.Ehrlich has called the plan unacceptable. Legislators are also working on several bill proposals to address the issue, including measures to extend rate caps, limits on how much rates can grow each year and sending electricity markets back to regulation. Yesterday, state Sen. E.J. Pipkin, R-Upper Shore, introduced legislation to force BGE to return $500 million it charged ratepayers since 1999. At the time, BGE said it needed the money to compensate it for being forced to build power plants for a customer base that could pick an alternative supplier under deregulation. Those nuclear and coal plants have since jumped in value as natural gas and oil prices have skyrocketed. Only a handful of residential customers have picked new suppliers.O'Malley is running to replace Ehrlich as governor in this year's elections. O'Malley's opponent in the Democratic primary also issued comments concerning the rate hikes and merger yesterday.Legislative oversight is needed immediately to see what steps need to be taken, particularly in light of the proposed rate hikes, before the merger is allowed to go through. If the Public Service Commission won't do its job, the legislature will have to do it for them, said Montgomery County Executive Doug Duncan.A spokeswoman for Ehrlich criticized the mayor's remarks yesterday, calling them opportunistic.The fingerpointing, the political gimmicks are a disservice to consumers who will be greatly affected when the increase kicks in this summer, said Ehrlich spokeswoman Shareese N. DeLeaver. Right now Ehrlich and the legislature are working together for a real solution.