Public Service Commission Catered to Power Companies Rather Than Consumers - Southern Maryland Headline News

Public Service Commission Catered to Power Companies Rather Than Consumers

By Maryland Senator Roy Dyson

I could not imagine a state agency (in this case, the Public Service Commission) charged with the responsibility of looking out for the consumer, approving electric rate hikes of 72 percent. But they did.

That is why I voted for Senate Bill 1102 this year. This legislation would have disbanded the present Public Service Commission and replace it with members who would work in the “public’s” best interests. I voted for this bill because I have little confidence in the current PSC.

The “crisis” brought about by the 72 percent rate hike was because of a bill passed in 1999 that approved deregulation of the electric industry. I didn’t think the concept was a good one then and voted against it. Unfortunately, I was proved right.

I was disappointed the governor vetoed Senate Bill 1102 and planned on voting for its override. However, the General Assembly Session ended before we were able to do so. Instead of addressing the issue of the outrageously high energy bills that will be mailed this summer to thousands of Maryland consumers, the PSC stood by its earlier decision to let the rates stay where they were. They caved in to the large energy corporations. That is not what the PSC’s mission is all about.

During the course of the General Assembly Session, the power companies told the legislature that they would "work with us on this issue." Leadership met constantly with members of the power companies. But the power companies' "demands" were not good enough for the consumers we are supposed to protect. They basically waited until the legislature left town to work with the very governor who refused to lead on this during the General Assembly Session.

The Governor, who called himself “a neutral arbiter” or an “honest broker” between the legislature and the power companies during the Session, cared so much about this issue that he missed one vital meeting all together with the power companies, the President of the Senate and the Speaker of the House. His reason? He didn't know where the meeting was! The meeting, by the way, was held in his office.

For these reasons and more, I did not support "an agreement" on the final day of the General Assembly that was to “solve” this problem. The “agreement” was apparently reached with Constellation Energy/BGE, the House of Delegates and the Governor. Why Constellation Energy/BGE were even at the bargaining table is a question all to its own.

The reason we did not take up this override during the regular 90-day General Assembly Session is because the legislature was told that the "deal" being worked out would fall through if the override were considered. So, time ran out on the 2006 General Assembly Session before we could address the override—just as I expect the multi-million dollar companies wanted.

There has been talk of a Special Session to work out a better "deal" for the consumers facing exorbitant price increases by these electric conglomerates. I believe a Special Session to address this problem in greater detail, rather than doing it in the final hours of a General Assembly Session is necessary. If we have a Special Session, I will support an arrangement that is consumer-friendly, not conglomerate friendly.

The Governor is blaming the original deregulation bill on the previous administration and yes Governor Glendening did support it. But, the governor has continually neglected to include a few relevant facts about the 1999 deregulation bill. He conveniently forgets to note that the 1999 deregulation bill was supported by every Republican member of the General Assembly - including many who now serve in his cabinet as well as the PSC's chair who as a delegate in 1999 served on the conference committee to ensure the legislation passed.

Also in 1999, Ehrlich supported electric deregulation in the United States Congress.

There is enough blame to go around. Once again, I do not regret my no vote on this legislation. Hopefully we can all come together to work out an arrangement that will benefit all of the consumers of Maryland.

Editor's Note: The following letter was sent out by the Bob Ehrlich for Maryland Committee today.
Governor Robert L. Ehrlich, Jr. announced a $1.2 billion financing package with Constellation/BGE for Maryland's working families which will dramatically mitigate electricity rate increases to 19 percent from the 72 percent increase expected to occur this summer as a result of legislation crafted by the Maryland legislature in 1999.

"After months of discussion, I am pleased to announce that my Administration has reached a framework with Constellation/BGE that will drastically reduce electricity rate increases for Maryland citizens," said Governor Ehrlich. "This framework will give Maryland's low-income and working families the option of an interest free phase-in of electricity rate increases."

The framework for rate relief for Marylanders is the result of months of good faith negotiations le d by Governor Ehrlich, which included the voice of consumers, Constellation and BGE representatives, legislative leaders, the Public Service Commission and others.

Here is what we can expect

* No interest for consumers who choose to participate in the program;
* Initial rate cap of 19 percent on July 1, 2006; 25 percent rate cap on June 1, 2007, and a transition to market rates by January 2008;
* 85 percent increase over FY 05 of State and federal assistance for low-income families;
* Opt-in, which will allow customers to affirmatively choose to be in the program.

Under the terms of the framework, the merger between Constellation Energy and Florida Power & Light will fund a $600 million contribution to ratepayers. Constellation Energy Group will contribute $60 million per year for 10 years, while BGE will incur $588 million of rate deferral, which allows for greater relief for consumers.

In addition, the State and Constellation/BGE will launch an aggressive public relations and marketing campaign to ensure that Maryland citizens are aware that they do have a choice. The campaign will include an education of consumer options through the use of State agencies and a wide-ranging radio and print ad campaign, as well as direct notification by mail led by BGE.

"The terms of this framework will allow customers an opportunity to make an informed decision based on the facts," said Governor Ehrlich.

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