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Power Rate Relief in Md. Squelched in Final Minutes
Gov. Robert L. Ehrlich Jr. was taking part in last-minute negotiations with Baltimore Gas and Electric Co.
(By Gail Burton -- The Washington Post)
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The marathon day began with high-level talks at 7:30 a.m. in the governor's suite of offices on the second floor of the State House. It had a slow start, with long periods of downtime as legislative analysts crafted the technical language needed to set the deal into motion.
Under the terms of the squelched deal, BGE customers would have paid 15 percent more in July and another 29 percent extra in June 2007. Customers would not have had to pay the full market price until January 2008.
Pepco and Delmarva Power customers could choose to spread rate increases over 18 months. Rates would have increased 15 percent in June, 15.7 percent in March 2007 and the rest by December 2008. The company has agreed to cover customers' interest costs.
Some lawmakers said before the votes that they were troubled that relief for BGE customers would rest on approval of the merger.
"How can we gamble this entire deal based on the success of a merger over which we have no control?" said Del. Patrick L. McDonough (R-Baltimore County). "If the merger fails, the money is gone."
Others said the frenzied push for passage last night was a flashback to 1999 -- the year the General Assembly passed legislation to deregulate the electricity market with the hope that competition would result in lower prices for customers. The promised competition has not materialized in part because the deregulation deal capped customer rates. Those caps will be lifted this summer for BGE's 1.1 million customers. Rate caps expired in 2004 for Pepco customers.
Sen. Brian E. Frosh (D-Montgomery) said the legislature was in danger of repeating its past mistakes because the pending deal does not give counties and municipalities the ability to shop for power on behalf of residents or require conservation.
The measure does call for a study of such efforts to spark competition, but Frosh said that "they've been studying it for seven years, and they've never done either because the utilities view it as taking money out of their pockets."
