Utility Agency E-mails Show Industry Ties

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By Matthew Mosk and Ann E. Marimow
Washington Post Staff Writers
Saturday, March 18, 2006

The head of the independent board that sets electricity rates in Maryland exchanged a series of candid e-mails with a Pepco lawyer last year in which he describes his decision to fire five senior staff members as giving a "lobotomy" to his agency.

Kenneth D. Schisler, chairman of the Public Service Commission, said yesterday that his comments were a "cynical" reference to how Democrats characterized upheaval at the regulatory agency. His e-mail is one of several that appear to show an industry lawyer's close connections with Schisler and Gov. Robert L. Ehrlich Jr. (R).

A printout of the lengthy e-mail exchange, first produced in conjunction with a lawsuit filed by a fired agency employee, was given to The Washington Post yesterday and authenticated by Schisler.

The document also offers a look at the inner workings of an agency that has come under fire during the past several days after it approved substantial rate increases for Baltimore Gas and Electric Co. and Pepco.

Democrats have said they believe Schisler had worked to dismantle the professional staff and said yesterday that the "lobotomy" remark is confirmation that they were right.

Many of those fired -- including the chief hearing examiner, chief engineer, director of accounting investigations, manager of external relations and public information officer -- were longtime aides considered more consumer-friendly than those who replaced them.

In a Feb. 7, 2005, e-mail to utility lawyer Carville Collins, Schisler wrote: "I am putting data together for our budget hearings in the event someone goes after me on the 'lobotomy' I performed on the agency. I think we have a record to stand on and if they go after me, I can defend."

In an interview last night, Schisler disputed the Democrats' interpretation, saying the term was a shorthand reference to what he considered Montgomery County Sen. Brian E. Frosh's "insulting" characterization of the firings.

"It wasn't me," he said. "I don't have the personal view that I performed a lobotomy." The former Eastern Shore delegate said he was anticipating questions about his dismissal of five employees at a budget hearing and "worried someone would seek to make an issue of the personnel changes and paint me as someone who had fired all the good people."

Democratic lawmakers said yesterday that other aspects of the exchanges may be even more troubling in that they show a close relationship between the state's chief regulator and the industry he regulates. The exchanges with Collins, a lawyer who represents nearly a dozen utilities, are written in a breezy tone and discuss such matters as the health of Schisler's wife.

"These e-mails raise a thousand questions," said House Speaker Michael E. Busch (D-Anne Arundel). "The answer to all of them is: The fix is in for the industry. There's no one left to advocate for the citizen ratepayer."

Schisler said yesterday that he has known Collins as a professional acquaintance for 15 years.


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