PSC Finds No Evidence of Conspiracy on Electricity Prices

The Maryland Public Service Commission announced yesterday that its investigation into the way electricity was purchased for 1.1 million customers in 2005-06 found no evidence that Baltimore Gas and Electric and its parent company, Constellation Energy, colluded to charge higher prices.

Since Maryland opened its markets to competition, electricity prices have been set in auctions held by utilities, which buy power from unregulated suppliers. The 2005-06 auction was the first since the rate caps that followed deregulation were removed. It resulted in a 72 percent increase in electric bills for BGE customers. When Gov. Martin O'Malley (D) took office last year, he pledged to investigate whether the auction was rigged because BGE paid much more for power than the cost to produce it and bought most of its electricity from its corporate parent. Utility regulators promised to find out whether the auction was competitive.

It was competitive, PSC Chairman Steven B. Larsen said yesterday at a hearing before the Senate Finance Committee. He discussed a bill that would set in motion the details of a settlement about electricity prices that O'Malley and Constellation officials announced last week.

"It would be very difficult to prove that auction prices are unlawful," says an executive summary of the review by the Kaye Scholer firm, a consultant to the PSC, which pored through bid documents from Constellation and several other power companies.

"We're gratified that the commission found no irregularities or wrongdoing on the part of Constellation Energy related to the auction," said Robert L. Gould, Constellation's vice president for corporate communications.

-- Lisa Rein

Deals Near on Bay Cleanup, Stem Cell Research

Negotiators from the House of Delegates and Senate moved yesterday toward resolution of several outstanding issues in the state's $31 billion budget.

Senators had advocated cutting in half a planned $50 million appropriation to a fund for the cleanup of the Chesapeake Bay for the next two years. Yesterday, senators agreed to a House proposal to make the cut only in the coming fiscal year.

Senators also proposed spending $18 million next year on stem cell research, more than either chamber included in its original budget plans. An additional $5 million could become available if state lottery proceeds exceed projections. House leaders are weighing that proposal.

Negotiators from both chambers also gave tentative approval to a proposal to take $35 million from the Maryland Automobile Insurance Fund to help pay for new helicopters for the state police. The fund, created by the legislature to insure high-risk drivers, has a larger balance than needed, lawmakers said.