Constellation Settlement Gets Preliminary Approval

By Annapolis Digest
Friday, April 4, 2008

Legislation that would allow Constellation Energy to give 1.1 million electricity customers in the Washington-Baltimore region a one-time, $170 credit on their bills won preliminary passage in the General Assembly yesterday.

But the Senate first voted 27 to 18 for an amendment that would require any new power suppliers in Maryland to return to regulation by the Public Service Commission.

"This is a vote to admit that deregulation has failed, and we need a better way," Sen. James C. Rosapepe (D-Anne Arundel), one of the amendment's sponsors, told his colleagues. "We are saying we can't change the damage that has been done, but we can make sure it never happens again in the state of Maryland."

In lengthy debate in the House and Senate yesterday, angry lawmakers blamed high power prices on Maryland's 1999 law that opened the state's electricity markets to competition. Many said that they regretted voting for deregulation.

Opponents said that the move to regulate new power suppliers could put the Constellation settlement in jeopardy and that they would try to kill the amendment today.

PSC Chairman Steven B. Larsen told reporters last night that he believes the amendment raises serious issues about whether the settlement would be intact.

"At the end of the day, I don't think anyone wants to put the settlement in jeopardy," he said.

About $1.5 billion in future costs to customers to decommission the Calvert Cliffs Nuclear Power Plant also would be scrapped by the bill, which writes into law a legal settlement reached last week between the Baltimore-based energy company and the state.

The agreement is intended to resolve a two-year battle between lawmakers and Gov. Martin O'Malley (D) and Constellation over a 72 percent rate increase for customers of Constellation's Baltimore Gas & Electric.

Also yesterday, a series of conservation measures backed by the governor won final approval in both chambers, despite objections from some lawmakers that they will lead to higher electricity bills.

The House agreed to set a goal of reducing the state's energy use 15 percent by 2015. Another bill would invest money from a new pollution fund paid for by power companies in a combination of energy efficiency programs and electric rate relief.

Both measures cleared the Senate this week. The chambers must work out differences in the amount of direct rate relief.

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