Duncan Says Md. Should Cap Electric Rates

Candidate for Governor Describes Decision to Deregulate as an 'Utter Failure'

Duncan said others in politics aren't willing to "offend their big donors." (James A. Parcell - Twp)

Montgomery County Executive Douglas M. Duncan (D), who has long pitched himself as a pro-business Democrat, said yesterday he wants the state government to intervene to stop power companies from imposing sharp increases in electric rates.

Duncan's announcement came as he seeks to gain traction against his opponent for the Democratic nomination for governor, Baltimore Mayor Martin O'Malley, and at a time when the public is increasingly concerned about spiraling utility rates.

Standing in front of the Baltimore headquarters of Constellation Energy Group, Duncan said he wants to reverse the state's 1999 decision to deregulate the electric industry and said he supports new rate caps.

"Electric deregulation has been a complete and utter failure," Duncan said. "The big energy companies, like the one behind me, sold us snake oil, and, frankly, we all bought it. We were wrong."

The state's electricity rate caps, which were implemented as a part of the state's 1999 deregulation efforts, are set to expire this year, and utility officials say they have to raise rates to remain viable. Baltimore Gas and Electric's 1.1 million customers face a 72 percent increase in July. Pepco customers in Montgomery and Prince George's counties are on track to pay 38.5 percent more in June.

The proposed increases have become a major issue in this year's elections. Gov. Robert L. Ehrlich Jr. (R) and leaders in the General Assembly are trying to blunt the impact.

Last week, the state Senate failed to pass a compromise that would have held rate increases to 15 percent this year. Ehrlich, Democratic leaders in Annapolis and power company officials plan to meet this week to try to come up with another deal that would spread the increases over a number of years -- an idea Duncan compared to "having a tooth removed bit by bit."

Duncan said O'Malley and Ehrlich couldn't be trusted with the issue because they have accepted tens of thousands of dollars in donations from BGE and its parent company, Constellation Energy Group, and their employees. He said O'Malley and Ehrlich were captive of "energy giants."

Last month, Duncan returned $2,205 in donations from Constellation Energy Group and $1,000 from a Constellation executive and called on Ehrlich and O'Malley to do the same. Duncan also received $3,250 from Pepco contributions in the past five years, according to the State Board of Elections. He said yesterday that he would review whether those donations also should be returned.

"We need leaders . . . who are willing to take on the special interests," Duncan said. "Neither the mayor nor the governor is doing that right now. They are both talking a good game and going through the motions, but they aren't willing to do anything to offend their big donors." Critics of Duncan in Montgomery have said he has relied too heavily on contributions from developers.

O'Malley plans to unveil his energy policy later this week. Both he and Ehrlich brushed off Duncan's remarks.

Ehrlich in the past has placed blame for the rate increases on Democrats, who controlled the governor's mansion and General Assembly when deregulation occurred. O'Malley and other Democrats have said the Public Service Commission, with the majority of its members appointed by Ehrlich, has not been aggressive enough as a regulator.

"Martin O'Malley has stood firm against Bob Ehrlich's Public Service Commission," said Hari Sevugan, O'Malley's communications director.

Voters aren't sure whom to blame. A statewide poll released today by Gonzales Research & Marketing Strategies showed 75 percent of residents are "very concerned" their electric bills will go up. But voters are split over who is most responsible for the increases.

The survey also shows O'Malley with a 44 percent to 35 percent lead over Duncan.