Md. Rate Relief Bill Became a 'Tough Sell'
Senators Feared Compromise on Electricity Increases Would Repeat Problems Wrought by Deregulation

By Ann E. Marimow
Washington Post Staff Writer
Wednesday, April 12, 2006

The General Assembly had adjourned an hour earlier, but House Speaker Michael E. Busch was still fuming, his face flushed as he sat in his office shelling peanuts by the handful.

"I cannot believe this. We worked on this for a month, and then to fall short," he said early yesterday. "How does that happen?"

In the final minutes of the legislative session Monday, a bill that would have provided some relief from soaring electricity rates this summer died suddenly in the Senate, falling one vote short on a procedural move.

The failure meant that Busch and every other lawmaker would have to return to their constituents -- in an election year, no less -- without a plan to blunt rate increases that could raise electric bills as much as 72 percent. In essence, it left customers with no relief and lawmakers with no leverage.

Busch was incredulous at his counterpart, Senate President Thomas V. Mike Miller Jr. (D-Calvert), the storied vote-counter and master of his chamber. "Miller couldn't move a bill? Gimme a break," he said.

Miller, for his part, said it was all a matter of votes, that his typically loyal senators simply couldn't abide a compromise in the bill that left the utility regulators on the state's Public Service Commission in place for more than a year.

"When it came down to the end, my members didn't want to keep the same people who rubber-stamped these rate hikes," he said after a bill-signing ceremony yesterday. "Regulars I can normally count on said, 'Look, I can't go with this bill.' It was a tough sell."

The compromise to hold rate increases to 15 percent for Pepco and Baltimore Gas and Electric Co. customers had been worked out during four weeks of talks among Republican Gov. Robert L. Ehrlich Jr., Democratic legislative leaders and representatives from BGE's parent company, Constellation Energy Group.

The company offered $60 million a year for 10 years to help phase in the 72 percent rate increases. Pepco agreed to allow its ratepayers in Montgomery and Prince George's counties to phase in a 38.5 percent increase as well. In exchange, the General Assembly would have dropped its plan to immediately disband the utilities commission and block a pending merger between Constellation and a Florida utility.

The governor said yesterday he would pick up where the legislature left off and determine if it would be necessary to bring lawmakers back for a special session or if he could strike a deal on his own. "These hours of negotiations were not wasted," he said. "We do have a framework for where to go from here."

A day earlier, everything had appeared on track, as the parties huddled around a horseshoe of tables at 7:30 Monday morning in the governor's ornate reception room.

But Sen. Philip C. Jimeno, an Anne Arundel Democrat who is a close ally of Miller's, said his first inkling that the deal was in trouble came at a caucus meeting two hours later. After laying out the details of the deal, Miller said something that made it immediately clear he was not putting his full weight behind this bill.

"He said, 'We'll just leave this up to you,' " Jimeno said. "He said, 'You're on your own.' "

Miller again expressed ambivalence, particularly about the PSC, when he and Busch emerged from a 1:30 p.m. meeting in Ehrlich's office. "We need honest ombudsmen who aren't talking to utilities behind closed doors," Miller said of the utilities commission.

By 5 p.m., two key participants -- Ehrlich chief of staff Chip DiPaula Jr. and Busch -- sat waiting for Miller in the balcony overlooking the Senate floor while the Senate president worked to override the governor's vetoes.

Finally, they met without him. Two hours later, there was a handshake agreement among the House leadership, the administration and Constellation. But downstairs, talking to reporters on the Senate floor, Miller described the situation as "volatile" and said "things look dismal."

When Busch got word that the bill was in trouble in a key Senate committee, he realized that the House would have to jump-start the process if his delegates were to get a vote on the issue that hits constituents so close to home.

With three hours remaining, he gathered his Democrats to convince them that an imperfect solution that offered ratepayers $600 million worth of relief over 10 years was better than no solution. He ordered last-minute amendments and 141 copies of the thick bill.

Meanwhile, Constellation Chairman Mayo A. Shattuck III and Constellation lobbyists were camped out in the governor's conference room waiting for word from downstairs. The governor was there. So were Lt. Gov. Michael S. Steele and some of Ehrlich's aides.

Between bites of baked chicken and pasta with asparagus, one participant said they would look at each other and ask in nervous anticipation, "What do you think? What do you think?"

As midnight neared, Shattuck kept tabs on the House and Senate from the upstairs galleries. Constellation wanted this bill to pass, spokesman Robert L. Gould said.

In the hallways and out on the floor for a time, it looked like action had stalled. The governor held a reception at Government House to celebrate the University of Maryland's women's basketball team, this year's NCAA champions. Legislators recognized special guests.

Behind the scenes, with the House bill moving, Miller convened the Senate Finance Committee to take up its version of the bill that would have required all five utility commissioners to be reappointed next session.

In the Senate lounge, members expressed deep concerns that the bill would be a short-term fix and would repeat the mistakes of 1999 -- the year the legislature deregulated the energy market and created the system that has led to rate increases. Lawmakers spent more than an hour quizzing a legislative analyst on the fine print.

"Translate that to English one more time,'' Sen. E.J. Pipkin (R-Queen Anne's) said.

When the bill reached the Senate floor at 11:35 p.m., Jimeno stared down at 23 pages of amendments and did the math in his head. There's no way, he thought, this bill was going to pass the Senate, get to the House and become law before midnight.

So after voting in favor of the agreement on an initial 26 to 19 vote to pass the bill, Jimeno decided to vote against the suspension of the rules needed to keep the measure moving. That procedural move failed to capture the necessary 32 votes, 31 to 14.

With five minutes to spare, delegates passed their bill with overwhelming bipartisan support, 128 to 9. But it was already over.

It is up to Ehrlich to decide whether to continue to involve the legislature or to negotiate on his own. At a news conference yesterday, he signaled he would prefer to go it alone.

"The Senate did nothing, the bills died and that's changed the landscape here," the governor said. "The folks who held this process up, they're going to have to make their case to the people."

Staff writer Matthew Mosk contributed to this report.