Bill Would Stretch Rate Hike, Aid Pepco Users

Under the Proposal, Utility Commission Would Be Dismissed

State lawmakers returned to Annapolis yesterday for a rare off-season reunion to try again to deliver relief for more than 1 million Maryland households bracing for a 72 percent spike in electricity rates next month.

Legislators got their first look at a measure to stretch out the increase for customers of the state's largest electric utility and give other companies, including Pepco, more flexibility to purchase power at the most favorable prices.

Sen. P.J. Hogan (D-Montgomery) said the legislation under consideration this week would "treat Pepco customers in Maryland the same as customers in the District. That's a huge advantage."

The bill, which could come up for a vote as soon as tomorrow, also would dismiss the embattled members of the Public Service Commission, whom Democrats accuse of being too close to the industry they oversee, and allow the attorney general to choose a consumer advocate for utility customers in the Office of the People's Counsel.

New commissioners would be appointed by the governor from a list of candidates supplied by the two legislative leaders. They would be empowered to pick apart the rationale for the rate increase approved in March for Baltimore Gas and Electric Co. customers and to examine the company's pending merger with a Florida power company.

"It's buying time for us to conduct the kind of investigation the PSC failed to conduct," said Del. Luiz R.S. Simmons (D-Montgomery).

Gov. Robert L. Ehrlich Jr. (R) signed an executive order yesterday to convene the special session tomorrow, but the initial reaction from his aides signaled that the chief executive and Democratic leaders were far from an agreement.

Chip DiPaula Jr., the governor's chief of staff, said the legislature is "trying to give half an answer and get away with it. What we need is a comprehensive and a full solution."

The legislative provision to fire utility commissioners is a "hollow attempt to shift blame," DiPaula said, because it was the General Assembly that stripped the commission of its ability to set rates as part of its deregulation deal in 1999. Ehrlich appointed all but one of the current utility commissioners.

Lawmakers narrowly failed to approve a rate relief package on the final day of the legislative session in April. The centerpiece of the latest proposal would phase in higher rates for BGE customers, starting with a 15 percent increase July 1 that would remain in place for at least 11 months.

A newly appointed Public Service Commission would determine the long-term schedule for easing customers into market rates after its review of the merger and other issues, such as the potential to recover more than $500 million from BGE's parent company, Constellation Energy Group.

Under the plan, the utility would borrow hundreds of millions of dollars to phase in the higher rates. Customers would begin to pay back the difference through an average monthly fee of $2.50 that could extend for as many as 10 years depending on what the PSC found in its investigation.