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Pointing Fingers Over Utility Rates

By Ann E. Marimow and Matthew Mosk
Friday, March 10, 2006

Maryland Gov. Robert L. Ehrlich Jr . said the General Assembly should have expected the hefty increases proposed for utility costs since many of those in office now helped pass electricity deregulation seven years ago.

"This was the design in 1999," Ehrlich (R) said. "There was a hope for competition in the retail market. That has not come about."

Ehrlich said he will lead an effort to bring together members of the state Public Service Commission and the General Assembly to help negotiate a solution to the impending crisis.

Pepco announced this week that it wants the state to approve a 38.5 percent increase in rates, which could increase a typical customer's bill by $468 a year. The Public Service Commission has agreed to allow Baltimore Gas and Electric to increase its rates by 72 percent, adding an average $743 to customers' bills, unless state lawmakers intervene.

Ehrlich dismissed the notion that he is not at the table, saying he "will continue to play a leadership role."

The governor's critics, however, have argued that he has not done enough to plan for what apparently could be sizeable rate increases by both Pepco and BGE.

Montgomery County Executive Douglas M. Duncan (D), a potential challenger to Ehrlich in the 2006 election, asked: "Where's the governor been on this? Why has he not convened a meeting with General Assembly leaders and public service commissioners to talk about what we do here?"

Yesterday, state senators vowed to press BGE for concessions. The utility's parent company is awaiting approval from the Public Service Commission for a merger with the Florida-based FPL Group.

"They helped get us here, and if these rates aren't softened, there's going to be an outcry to go back to regulation," said Sen. Thomas M. Middleton (D-Charles), who has met with BGE representatives and whose Senate committee is handling legislation on the issue. "They have something at stake."

But Middleton cautioned against passing "feel-good" measures that would merely delay the higher rates until after the election. Legislators have introduced a range of bills, including one to require the attorney general to take an active role in reviewing the proposed merger and another to freeze the planned rate increases for BGE.

A Freeze for Tuition

Tuition at Maryland universities would be effectively frozen for one year under a budget proposal approved yesterday by the Senate Budget and Taxation Committee.

"We have seen tuition rise 43 percent over the last couple of years," said Sen. P.J. Hogan (D-Montgomery), chairman of the subcommittee that developed the proposal.

There were no objections from committee members, and the proposed freeze was accepted as part of an overall plan to cut about $188 million from the budget that Gov. Robert L. Ehrlich Jr. submitted to the legislature in January.

The full Senate is scheduled to take up the budget and the cuts proposed by the committee next week.

The Associated Press contributed to this report.

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