Urgency Builds for Electric Deregulation
By Robert E. Pierre
The pressure on the Maryland General Assembly to approve electric deregulation this year ratcheted up yesterday as Virginia lawmakers acted to create an open market that could offer lower rates to entice companies with big electric bills.
At a time when the two states are competing for the corporate headquarters of the Marriott chain, Maryland legislative leaders and representatives of large electric consumers agree that the state must follow Virginia's lead to keep businesses -- particularly those whose power demands are greater than Marriott's -- from fleeing in search of low-cost electricity.
But as the legislature nears the midpoint of its annual 90-day session this week, legislation allowing competition to begin in July 2000 is on shaky ground. Few of Maryland's 188 lawmakers say they understand the complexities of moving from a regulated monopoly to a free-market system, and fewer still fear a catastrophe will ensue if no bill passes before the session adjourns in April.
Utilities and businesses "are going to have to make a convincing argument that harm will befall us if this bill doesn't pass," said Del. Ronald A. Guns (D-Cecil), who as chairman of the House Environmental Matters Committee, is responsible for shepherding the policy portion of the bill through the House of Delegates.
The opportunity to make the case for deregulation -- or argue against it -- comes today during what is expected to be a marathon hearing by members of the House and Senate.
Proponents such as Senate President Thomas V. Mike Miller Jr. (D-Prince George's) say Maryland can't afford to wait. With Virginia joining Pennsylvania and Delaware in the move to deregulation, Maryland soon will be bordered on three sides by states offering competitive electric rates.
"It's a very complex subject, and it's difficult for many members of the House and Senate to grasp," Miller said. "There are others who are not sure of the benefits and want to err on the side of caution. I'm not certain we can afford to do that in this rapidly changing area of the law."
If the legislature approves a plan by April, the Public Service Commission plans to allow Marylanders to begin choosing their power provider in July 2000 as part of a three-year phase-in.
"If you don't enact it this year, you can't start in the year 2000," said Thomas A. Saquella, president of the Maryland Retailers Association and co-chairman of the Alliance for Customer Choice of Electrical Suppliers and Services. "We're already behind, and the utilities need 10 to 12 months to get it set up."
But proponents will face a wary audience of legislators today. And many others -- including county officials who stand to lose millions in property taxes as a result of deregulation -- would be thrilled if the legislature postponed its decision for a year.
Chief among the skeptics is Gov. Parris N. Glendening (D), who says he fears that big customers -- hospitals, supermarkets and factories -- will get lower bills and that those savings will result in higher costs for homeowners and small businesses.
Across the country, state legislators are accustomed to deciphering the effect of sometimes arcane laws on the average citizen. But even in an environment accustomed to hours upon hours of mundane daily testimony, the intricacies of electric deregulation and its relentless jargon have been frustrating.
While presiding over a briefing this week in which members were bombarded with terms like "aggregation" (grouping together to buy in bulk) and "unbundled rates" (itemized bills), Guns rolled his eyes, leaned back in his chair and let out an exasperated sigh.
"You guys have got to bring this down to our levels," Guns chided a panel of regulators from the Maryland Public Service Commission.
The difficulty is understandable, said Michael Delaney, a spokesman for Baltimore Gas and Electric Co.
"It's a big bite to chew," Delaney said. "We're hopeful that people are really going to be able to focus during the time that's left. It's going to happen sooner or later."
And later is just fine with Mary Marsh, legislative chair of the Maryland chapter of the Sierra Club. She doesn't buy the argument that delaying deregulation by a year would be disastrous for companies. Marsh also thinks legislators are unprepared.
"If it means one year of waiting until it's done right, then companies would almost look foolish to move," Marsh said. "We don't really feel confident that legislators have all the answers they need to do good legislation. They need more answers."
© Copyright 1999 The Washington Post Company