Ehrlich in Awkward Spot on Rates

House Speaker Michael E. Busch (D) said he has been surprised by the governor's neutral posture.
House Speaker Michael E. Busch (D) said he has been surprised by the governor's neutral posture. (By Bill O'leary -- The Washington Post)
By Ann E. Marimow and Matthew Mosk
Washington Post Staff Writers
Monday, March 27, 2006

The furor over rising electricity prices has caught Maryland Gov. Robert L. Ehrlich Jr. between his loyalty to the state's business community and an electorate bracing for bloated bills this summer.

As Maryland lawmakers tried to squeeze concessions from the state's largest electric company last week and utility lobbyists hustled to Annapolis to preserve their interests, the Republican governor declared himself a "neutral broker."

It was an unexpected statement from the governor, who has repeatedly told Marylanders his job is to set the agenda on such pivotal matters. But it highlighted a rare dilemma for Ehrlich, the state's first Republican governor in a generation and one who has committed himself to improving the state's business climate. That has included remaking the state's utilities commission in what he describes as a pro-business mold.

"He can't turn his back on the [utilities] completely," said Matthew Crenson, a Johns Hopkins University political science professor. "But if people get angry enough, he'll have to respond to the public outcry."

Since news of rising rates for Pepco and Baltimore Gas and Electric Co. customers broke this month, the governor has said rate increases of as much as 72 percent "will not stand." But his failure to offer a firm plan to forestall rate hikes is a sign, Crenson and others said, of the governor's awkward position.

Ehrlich was candid about his dual role in an interview last week. He said that he is concerned about working-class Maryland residents who would be pressed to pay $742 more a year for electricity but that he also must look out for the financial health of Constellation Energy Group's BGE -- a major employer that keeps the lights on. He said he views himself as a go-between for the Democrat-controlled General Assembly and the utility companies.

"We're in the middle here as far as we're playing a little bit of the broker role," he said. "Brokers look at both sides, and brokers weigh merits, and brokers get to yes, and that's our bottom line."

It's too early to know how the struggle over electricity rates will play out; political leaders from both parties have been trying to negotiate a plan to scale back the hikes approved by the state's Public Service Commission. Pepco's customers in Montgomery and Prince George's counties would see a 38.5 percent increase this summer, raising their bills an average $468 annually.

If handled poorly, this could become a defining election issue for the governor and legislators this fall, analysts and politicians say.

There are certain issues that penetrate the electorate, much in the way rolling blackouts in California helped seal the fate of recalled Gov. Gray Davis or a failure to adequately plow streets after a blizzard cost mayors in Chicago and Denver their seats.

"Voters have these clonk-on-the-forehead moments," said Thomas Schaller, a political science professor at the University of Maryland Baltimore County who is backing one of the Democrats vying to unseat Ehrlich, Baltimore Mayor Martin O'Malley. "Some issues just sink in because they have a day-to-day resonance that's universal. Everybody has to pay an electric bill."

House Speaker Michael E. Busch (D-Anne Arundel) and Senate President Thomas V. Mike Miller Jr. (D-Calvert) said they have been surprised by the governor's neutral posture.

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