Legislation designed to slow down utility rate increases in Maryland move closer to enactment today when the Senate gave preliminary approval to the measure and the House, for the second time in three days, rejected industry-backed amendments that would have gutted it.

The 63-to-55 vote in the House to reject the amendments came as a surprise to both opponents and proponents of the heavily lobbied bill that would eliminate the so-called "make-whole" procedure under which utilities without hearings by the state Public Service Commission.

It was widely believed that a similar vote taken Monday night would be overturned under pressure from utility lobbyists and House leaders. "We didn't know our own strength," said Del. Timothy Maloney (D-Prince George's), who had worked to uphold the earlier vote but expected to lose.

Proponents of the utility-favored procedure attributed their defeat today to labor lobbying arising from a union dispute with the Baltimore Gas & Electric Co. "It got cut up in a completely unrelated issue," said Environmental Matters Committee Chairman Torrey Brown (D-Baltimore).

At an early morning meeting last week, before several committee members had arrived, Brown's committee passed amendments to save "make-whole." Those circumstances were cited by some delegates to justify their floor rebellion against the House's hallowed committee system.

So divisive was the issue this week that an attempt by one delegate yesterday to distribute news articles on the subject ran afoul of majority leaders Donald Robertson (D-Montgomery), who snatched the offending literature from the hands of pages, and of House Speaker Benjamin L. Cardin, who declared the distribution out of order.

Brown, confident he had the votes to prevail, argued today that consumers actually would benefit "in the long run" from more frequent rate increases combined with the bill's other provisions.

"If this is a consumer bill, I can't understand why all these [utility] lobbyists are coming out of the woodwork," said Del. Raymond A. Dypski (D-Baltimore).

In the Senate, Economic Affairs Committee Chairman Harry McGuirk (D-Baltimore) declared "make-whole" a "noble experiment" that failed, and the bill to abolish it except for small utilities sailed through without opposition.