House, Senate bring the thunder in lightning round

Electric-rate plan in governor’s hands

Friday, June 16, 2006

Click here to enlarge this photo Photos by Chris Rossi⁄The Gazette Del. Marshall T. Goodwin makes a point to colleague Hattie N. Harrison (top) as the House began its deliberations on electricity rate relief and stronger oversight of sex offenders.

Thursday’s announcement shows Ehrlich is trying to rewrite a script familiar since his election in 2002 where Democratic leaders cast aside the Republican governor’s policy objections and overturned his vetoes easily.

This time, Ehrlich appears to be ratcheting up the effort to have the veto sustained, forcing the General Assembly into changing its rate plan.

‘‘After we provide an explanation, there may be another opportunity for these folks to vote,” he told reporters outside Government House, an indication he was not conceding defeat.

In some ways, the relief plan for Baltimore Gas and Electric ratepayers resembles others proposed in the past five months that mitigate a 72 percent increase in energy costs caused by bad weather in the Gulf of Mexico and unrest around the Persian Gulf.

The General Assembly’s plan, however, fires the Public Service Commission, which has been at the center of political storm since it signed off on the rate hike earlier this year. Ehrlich appointed four of the PSC’s five members and has defended their role in the rate debate.

Lawmakers installed legislative trapdoors throughout the bill that inspired the ire of Ehrlich and others. For one, all challenges must be filed into the Baltimore city Circuit Court, where Baltimore Mayor Martin O’Malley (D) successfully challenged a rate plan Ehrlich negotiated in April. And the bill forbids using state money to challenge the legislation.

Key provisions The electricity rate bill, which passed the House 109-26 and the Senate 36-11, would: Fire the Public Service Commission, to be replaced by 10 names submitted by the Senate president and House speaker. Increase residential rates by 15 percent on July 1, which last until June 1, 2007. Charge BGE customers $2.19 a month for 10 years to cover the cost of deferring the rate hike. Allow customers to participate in another rate deferral plan developed by the new PSC on June 1, 2007, or pay market rate prices for their power.

If a challenge finds the PSC firing unconstitutional, the bill includes its own Plan B: The commissioners then would serve at the pleasure of the attorney general, who could fire them and appoint their successors.

‘‘It’s Scotch tape and baling wire because all it’s designed to do is get it beyond the election,” said Alan R. Friedman, Ehrlich’s director of legislative relations.

The governor said his veto hearing next week would add transparency to the process, revealing some of the ‘‘brand-new” provisions added since his relief plan was scuttled in the court proceeding.

‘‘It will give an opportunity for the public to be heard on this scheme. ... A lot of people want to be heard,” he told reporters. ‘‘Whether they’re positive or negative, people need to know the fundamental facts.”

In addition to helping him decide whether to veto the legislation, Ehrlich said, the hearing also would highlight reasons why lawmakers should sustain his veto.

Sen. Thomas McLain Middleton, who chairs the Finance Committee, said Thursday morning the governor almost has no choice but to veto the bill after securing the support of Senate Minority Leader J. Lowell Stoltzfus and Minority Whip Andrew P. Harris.

‘‘The governor is going to run a freight train through the media with this thing. If the governor doesn’t veto it, he would have done them a great disservice,” said Middleton (D-Dist. 28) of Waldorf.

Cautious praise, criticism

Reaction to the bill appeared to be mixed.

BGE spokesman Robert L. Gould said the company did not agree with the entire bill, but was pleased the customers got a rate stabilization plan.

‘‘There are some things in there we don’t like. The fact is we were fighting for the very survival of the company,” Gould said. ‘‘We need to recover our costs and we need certainty of when we go to market [pricing]. And we got those.”

Wall Street reacted Thursday by sending BGE parent Constellation Energy’s stock 48 cents higher to $54.64 a share.

Ehrlich was on talk radio Thursday morning, ginning up opposition.

Sen. John A. Giannetti Jr. (D-Dist. 21) of Laurel said he had received many e-mails from constituents supporting what passed.

‘‘Based on what I can tell, the people who are upset at the BGE rate reduction plan are within the WBAL [radio] listening area,” Giannetti said.

The measure also takes away a $6 million tax break BGE had received to supplement a fund that assists low-income residents with their electricity bills.

‘‘By itself, the state legislature singled out one company for discriminatory treatment, jeopardizing their financing, taking away their tax credit and limiting their appeal rights,” said William Burns, director of communications for the Maryland Chamber of Commerce.

The chamber wasn’t the only group to criticize the relief plan. The Chesapeake Climate Action Network and the Clean Energy Partnership issued a joint statement, rapping the bill for providing short-term relief and no long-term stability. The groups wanted consumers to get more help paying for energy-efficient home improvements.

Veto-proof passage

The bill passed shortly after midnight Thursday, lawmakers passed the rate relief package, with a 36-11 vote in the Senate and a 109-26 vote in the House.

All but three Senate Republicans — J. Robert Hooper (Dist. 35) of Street, E.J. Pipkin (Dist. 36) of Stevensville and Sandra B. Schrader (Dist. 13) of Columbia — opposed the bill.

One House Democrat, Kevin Kelly (Dist. 1B) of Cumberland, opposed the bill. Fifteen Republicans, many from the BGE service area, supported the bill.

Although Ehrlich had the support of most of the legislature’s Republicans, some were pleased with the bill. Hooper said it was a good compromise.

Pipkin, who has charted the course as the legislature’s pro-business populist, was unabashed in his support.

‘‘I think the General Assembly has risen to the challenge. This is a consumer-friendly solution to provide real rate relief,” Pipkin said.

Other Republicans refused to join Ehrlich in his support of the PSC.

Del. Patrick L. McDonough (R-Dist. 7) of Middlesex called them ‘‘useless and anti-consumer.” McDonough voted for the bill, even though he said the PSC firing would be found unconstitutional.

‘‘I’m not a big fan of the PSC,” said Del. Herbert H. McMillan (R-Dist. 30) of Annapolis. ‘‘By the same token, you have to realize, they wouldn’t be changing the rules the PSC operates under if they weren’t flawed to begin with.”

Senate Republicans offered several amendments during about four hours of debate Wednesday. One, which would have upheld the current PSC, was easily shot down.

‘‘We have a responsibility to make sure that the people calling balls and strikes are fair and that’s what this bill does,” said Sen. Brian E. Frosh (D-Dist. 16) of Bethesda, who read e-mail discussions between PSC Chairman Kenneth D. Schisler and BGE lobbyist Carville Collins on the Senate floor to underscore that the current PSC is too friendly to utilities.

Although the focus was on BGE, the bill included elements for other power companies. It includes the deferred rate plan approved for Pepco and Delmarva Power and Light customers in May.

‘‘It puts Pepco and Delmarva customers much more in line with how we’re going to treat the BGE customers,” said Sen. Patrick J. Hogan (D-Dist. 39) of Montgomery Village.

Other power companies will benefit from a change in the way utilities will bid their electricity needs. Part of the reason for the 72 percent increase was blamed on the timing of BGE’s power auction.

Governor’s silence

Lawmakers said they thought Ehrlich was disengaged for the whole special session.

Hooper, a Harford County Republican, said he had received no word from the governor or his aides.

‘‘That left me to go do what I had to do,” he said.

Some legislators did not understand why no one from the Ehrlich administration testified Wednesday at a marathon hearing on the proposals. Friedman said no one was invited.

‘‘I wonder if Duncan and O’Malley were invited particularly to be there,” Hooper said.

Montgomery County Executive Douglas M. Duncan and O’Malley, both Democratic gubernatorial hopefuls, waited hours for a chance to contribute their two cents on electricity rates.

‘‘Just because we’re not playing in the little political theater, it doesn’t mean we’re not engaged,” Friedman said.

Democrats, meanwhile, accused Ehrlich of directing the political theater with his veto hearing next week. In announcing the hearing Thursday, Ehrlich invoked the names of storied Democratic governors, William Donald Schaefer and Marvin Mandel, who held similar hearings during their terms.

Some of the echoes of the past do not reach that many years back.

Although special sessions are rare, this is the second in two years. In 2004, Ehrlich spent months warning of an impending crisis from rising medical malpractice insurance rates. He called a session in December, and the legislature passed a plan. But Ehrlich objected to the final version and he vetoed the bill. The lawmakers then overturned the veto.

A veto, and a subsequent override by the legislature, has been a familiar refrain during Ehrlich’s tenure. During this year’s regular session, Democrats overturned vetoes on 14 measures. During the special session, they overturned two other transportation-related vetoes.

The vetoes and the overrides have provided Ehrlich, who has shied away from engaging O’Malley or Duncan publicly, with a way to frame his re-election campaign. Instead of running against the mayor or the county executive, he has been running against all the Democrats in the General Assembly.

With a commitment to elect more Republicans this fall, Ehrlich believes the electricity bill — coupled with the early voting bill, the failure to reform Baltimore city schools and the Wal-Mart bill — will help him in that cause.

‘‘There is a theme here,” Ehrlich said. ‘‘Time and time again, [Democrats] are overreaching.”

Staff Writers Thomas Dennison and Alan Brody contributed to this report.