Pepco politics
Pinch me. Is it 2010 or 2006? Not only are the same two candidates running for governor, but now the state Public Service Commission is, once again, a political football.
In 2006, more than a million Baltimore Gas and Electric Co. customers were scheduled to receive a 72 percent increase in electricity rates 90 days before the election. This political time bomb dated back to 1999 when, on behalf of an Enron lobbyist, state Senate President Mike Miller sponsored legislation deregulating Maryland's electricity industry.
Few lawmakers read or understood the long, complex bill but, thanks to the Statehouse buddy system, Miller got what he wanted (somewhat like President Obama and health care). Gov. Parris Glendening signed the bill, and the Public Service Commission worked out the details with the power companies.
That's where things ran amok. The supposed purpose of deregulation was to lower rates through competition among providers rather than relying on a single, regulated company.
But deregulation never had a chance because, as part of the deregulation deal, the state froze electricity rates at 1995 levels until 2006. Maybe this was supposed to benefit ratepayers, but it killed the likelihood of new electricity providers coming into Maryland's market because it prohibited them from charging market rates.
It was a complete contradiction: Let rates rise or fall according to market competition but, by the way, we're freezing rates at 1995 levels. Gosh, wonder why there's no competition six years later?
When Gov. Bob Ehrlich and the 2006 Democratic legislature couldn't agree on how to make BGE swallow the costs, the Democrats decided to avert this political disaster by blaming it on Ehrlich.
So, the Democrats and Ehrlich's opponent, Martin O'Malley, began chanting that the 72 percent rate hikes were the fault of Ehrlich's Public Service Commission because it was "too cozy" with the industry.
The media, anxious to get rid of Ehrlich, joined the chorus transforming "too cozy" into the conventional wisdom. An emboldened O'Malley then promised to fire Ehrlich's PSC and to roll back the rates if elected.
All this was pure demagoguery because O'Malley had no power to fire the PSC, nor could he roll back rates because the PSC wasn't responsible for the rate hikes in the first place. Of course, all this came to light after O'Malley was safely elected.
The final irony? Now that the rate freeze is lifted and competitive deregulation is starting to work, O'Malley and many Democrats want to go back to regulation.
Four years after the BGE rate hike debacle, O'Malley is playing PSC politics again. But this time it's not BGE rates in Baltimore, it's Pepco power outages in the D.C. suburbs.
Three rogue storms swept through this area in late July and early August knocking out power to hundreds of thousands of Pepco customers. Food rotted in refrigerators, traffic snarled at light-less intersections, and people fumed in the dark as Pepco struggled for days to restore power.
After the final storm, the first light bulb to go on was in O'Malley's head. these power outages aren't a public catastrophe, they're a political godsend. Scapegoating Pepco will work now, just like scapegoating Ehrlich did back in 2006. It's an ill wind that blows no good!
So O'Malley directed his PSC to launch an immediate investigation and, when the PSC called Pepco onto the carpet at a hearing Tuesday, O'Malley held a press conference and called radio talk shows taking credit. This, undoubtedly, came as a surprise to Pepco officials who donated $34,000 to O'Malley.
Will the grandstanding work? Probably, but inquiring minds might ask, "Why now?" Pepco's miserable service restoration performance dates back years. Remember tropical storm Isabel? Our house was without power for more than a week. Or how about last winter's blizzards?
Years ago, Pepco became so unreliable that our family bought two portable generators. Several neighbors put in underground propane tanks powering expensive hard-wired household systems. That's because our neighborhood was suffering frequent Pepco outages year after year. All it took was one limb or a breeze.
So I appreciate O'Malley rushing to our rescue, but I repeat, "Why now"?
O'Malley likes reminding us that he was born and raised in Montgomery County. And he still has family here who, presumably, are familiar with Pepco's years of power outage incompetence.
So why, 70 days before a tight election, do we finally get the governor's attention? And will we end up like BGE's customers who discovered, after the 2006 election, that O'Malley's attention was merely an election-year phenomenon?
Blair Lee is CEO of the Lee Development Group in Silver Spring and a regular commentator for WBAL radio. His column appears Fridays in The Gazette. His e-mail address is blair@leedg.com.