Glendening Pushes for Electric Rate Cut
By Robert E. Pierre
Maryland residents should receive a 7.5 percent cut in their electric rates if the state moves forward with plans to do away with state-regulated monopolies and allows power companies to compete with one another, Gov. Parris N. Glendening proposed yesterday.
The governor urged lawmakers to lower residential rates and freeze them for five years. His proposal was intended to stanch criticism that only large energy consumers such as hospitals, supermarkets and factories would have the clout to bargain for cheaper rates under legislation allowing competition to begin in Maryland in July 2000.
"This would build in some protections for residential consumers . . . and let the big dogs go out and compete for their rate reduction," said Joe Bryce, Glendening's chief legislative officer, during a Senate Finance Committee work session.
Glendening (D) presented his proposal the same day House Speaker Casper R. Taylor Jr. (D-Allegany) offered his own plan to cut rates by 2 to 5 percent. The governor's proposal is similar to one recently approved by Delaware lawmakers as part of a move to deregulate the electric industry there.
But his suggested rate cut met with intense skepticism from utilities and some legislators yesterday. State Sen. Thomas L. Bromwell (D-Baltimore), for instance, said he's concerned that no matter what the legislature does, consumer rates will rise before eventually falling below current levels. Bromwell, who chairs the Senate Finance Committee, suggested that the governor was grandstanding and trying to look good at legislators' expense.
"You know what the difference is?" Bromwell asked Bryce rhetorically. "We're going to be here in five years, and he's not. . . . At this stage of the game, anything less than 7.5 percent could be construed as anti-consumer."
Baltimore Gas & Electric Co. legal counsel Robert Fleishman threatened legal action against the state, contending that such a mandated rate cut would be illegal. And he said it would make home-grown utilities uncompetitive and could force BG&E to lay off employees.
Maryland's electric rates, though slightly above the national average, are moderate by regional standards. And Fleishman said reductions have been mandated only in states such as California, Delaware and New Jersey that have much higher rates.
Taylor said his plan would leave most of the rate-cut decisions to the Public Service Commission. Bryce said the commission might not be as persistent as the governor and legislature in keeping residential rates low, but Taylor dismissed that suggestion.
"The [Public Service Commission] has been professional enough and competent enough to protect Maryland ratepayers for 75 years," Taylor said. "It has kept our highest current rates lower than Pennsylvania and Delaware."
House and Senate versions of the deregulation bill currently call for residential rates to be capped at current levels for four years, and for setting up special funds to cover the cost of environmental protections and to ensure that low-income customers get power. After weeks of negotiations with interested parties, both House and Senate committees are expected to approve measures this week and send them on for final approval.
Bromwell criticized the governor's office yesterday for being absent during many work sessions.
"We've been meeting for 20 to 30 hours on this [expletive] bill," Bromwell thundered. "In the eleventh hour, we're getting amendments."
But Michael Morrill, a Glendening spokesman, said the governor has been weighing the matters for weeks.
"This mandated reduction for residential consumers provides a solid guarantee that individual homeowners will see real savings in their monthly bills," Glendening said in a statement yesterday.
© Copyright 1999 The Washington Post Company