20060331 Gazette gets Maryland deregulation debacle correctly
In today's March 31st, 2006 edition of the Gazette, columnists Barry Rascovar and Blair Lee accurately portray the deregulation debacle currently occurring in the Maryland General Assembly
Friday, March 31, 2006
Are state legislators playing April Fools’ jokes on us? Are they serious about crucifying one of Maryland’s biggest corporations and trashing a 96-year-old regulatory agency to ensure their re-election? Or is it a negotiating ploy?
It’s getting bizarre. Lawmakers are operating on pure emotion. Self-preservation is driving them to pass wildly punitive bills that could have long-lasting and severe consequences.
The House and Senate may well be violating both the federal and state constitutions in seeking to hold hostage Constellation Energy’s $11 billion merger with FPL Group. Firing the Public Service Commission and replacing commissioners with Democratic allies of legislative leaders makes even less sense if the objective is fair and impartial regulation of utilities. Then there’s the brazen attempt to seize half-billion dollars from Constellation because a law passed in 1999 by the General Assembly turned out to be highly profitable for Constellation but not for the state.
Welcome to the Banana Republic of Maryland, where legislative dictators are blowing up long-established government traditions and using the legislature as a partisan vehicle to strip power from a governor who belongs to the wrong political party.
Don’t like the Republican governor’s appointments to the PSC — even though Democratic legislators approved their nominations? Fire them and give the Democratic House speaker and Democratic Senate president power to appoint a majority to the panel. Politicizing the PSC will put an end to that panel as an independent regulatory arbiter and turn it into a pawn of the Democratic General Assembly.
It’s not the only mess being foisted on the public. Look at the irrational effort to junk $90 million of touch-screen voting machines and spend $50 million on less-reliable optical-scanners.
The House of Delegates passed a bill not only discarding the current high-tech machines — because of allegations the software can be tampered with — but mandating less-accurate voting machines be rented. It did so after receiving promises from a single vendor it could deliver all these machines in time for the September primary.
Now it turns out this vendor has failed to meet delivery deadlines in other states. How come no legislator raised questions about who’s behind this slick deal that seemingly violates every procurement safeguard?
Meanwhile, a Senate panel is mulling a plan to turn Maryland’s elections into 100 percent mail-in votes — an experiment never before tried here and attempted on a statewide level only in Oregon.
Advocates insist on a ‘‘paper trail” for ballots, though the systems under discussion are far more prone to error. They insist on abandoning a system that produced the most accurate vote count in the nation two years ago.
State and local election officials have insisted for months there isn’t time to bring in a brand-new voting system. But that hasn’t fazed lawmakers.
Sensible, practical ideas don’t stand a chance in this legislature. As a result, Maryland’s fall elections could be in serious jeopardy.
Meanwhile, the hottest words are reserved for the electric rate increase crisis. Lawmakers keep trying to ignore reality.
Fact: The Democratic legislature and the Democratic governor approved electric deregulation and a freeze in consumers’ power rates in 1999.
Fact: Agreements implementing that law were approved by the Democratic-appointed members of the PSC and the Democratic-appointed People’s Counsel in 2001 and 2002.
Fact: These are legally binding actions.
One of the few sane voices has been People’s Counsel Patricia Smith, a liberal Democrat whose strong legal credentials led to her appointment by Republican Gov. Bob Ehrlich. She’s been saying things legislators don’t want to hear.
Energy prices will continue to rise, she says. It’s crazy to focus on things the legislature cannot alter. Pepco and Delmarva Power & Light customers were hit with large electric rate hikes starting two years ago when their rate freezes ended. Where was the outrage from lawmakers?
Now those power companies are raising rates 38 and 35 percent, respectively, to reflect the higher cost of power. Baltimore Gas & Electric Co. customers get socked with an unwelcome 72 percent increase this summer because BGE negotiated a longer rate freeze.
All of this flowed from the legislature’s 1999 vote. Lawmakers ‘‘can’t wave a wand,” Smith says. ‘‘There was no parachute built into that law.”
Firing members of the PSC misses the point. Their hands are tied by the 1999 law, too. Appointing new commissioners friendly to legislative Democrats and hostile to electric companies shatters the underpinnings of Maryland’s utility regulatory system.
Smith wants lawmakers to focus on ways to protect customers in the future. She thinks stronger regulation by the PSC is necessary as well as new methods for purchasing power, the re-acquisition of power plants by local utilities and authority for the state to buy its own power plants.
These are intriguing ideas. But Smith, who was hired to be an independent consumer advocate, has been ignored by politicians. Instead, we get political tripe posing as substance.
Fortunately, there’s still time for a moment of clarity. If legislative leaders use their preposterous PSC⁄electric rate proposals as bargaining chips, a workable compromise is possible. If legislators finally heed veteran election officials, a sensible balloting plan could surface. We have not yet reached the point, as Dante might phrase it, where the words over each legislative chamber read, ‘‘Abandon hope ye who enter here.”
Barry Rascovar is a communications consultant in the Baltimore area. His Wednesday morning commentaries can be heard on WYPR, 88.1 FM. His e-mail address is brascovar@ hotmail.com.
Friday, March 31, 2006
In politics, as in life, self-preservation is the strongest instinct. And in politics self-preservation means re-election.
That’s why, when faced with common extinction, statehouse lawmakers circle the wagons to collectively save themselves. Temporarily they drop their partisan, racial and regional differences and all become incumbents. Then, once the storm passes, they go back to infighting.
That’s what happened with the 1986 savings and loan crisis and the 1978 property tax rebellion. The incumbents knew that, instead of blaming each other, they’d better work together or they’d all be unseated.
So why are today’s statehouse lawmakers blaming each other instead of banding together to solve the energy rate hike crisis? Do they really believe that incensed voters, clutching their nearly doubled energy bills, will care who voted for deregulation seven years ago or why competition failed to materialize?
Believe me, the statehouse norm that ‘‘you kill my dog, I kill your cat” applies to the voters as well. ‘‘You double my electric bill, I vote you out of office.” Unless the incumbents do something quickly, almost 2 million ratepayers will receive new, astronomical energy bills right before the elections.
But instead of working together the incumbents are playing a risky game of political ‘‘chicken” with one eye on the clock and the other on the precipice.
The Democrats won’t accept any solution that lets Republican Gov. Bob Ehrlich look good. They’ll risk anything, even their own re-elections, to deny Ehrlich a major political victory this close to Election Day. Conversely, Ehrlich knows that any solution he negotiates with the power companies now — no matter how beneficial to the ratepayers — will be labeled ‘‘inadequate” by the Democrats and the partisan media.
So Ehrlich is biding his time while the Democrats rush a host of emergency measures through the legislature. One makes Constellation Energy cough up $528 million in past charges. Another holds hostage Constellation’s $11 billion merger with a Florida utility company until Constellation solves the rate hike, and another switches control of the Public Service Commission from the governor to the legislature.
It bothers the Democrats little that these bills are unwise, illegal, ineffective and threaten to drive the utilities into bankruptcy (remember these are the same people who gave us the Wal-Mart Bill). Their plan is to make Ehrlich veto the bills, then override his vetoes and hope the terrified utilities cave in to the legislature’s wholesale recklessness. Then the Democrats can declare ‘‘victory” and label Ehrlich a utility lapdog. In Annapolis this passes for statesmanship.
Meanwhile, just in case their strategy backfires, the Democrats (and the Baltimore Sun) are busy rewriting history. If the voters ever find out who caused the rate hike crisis, the Democrats will be in deep trouble. After all, the 1999 bill that deregulated Maryland’s energy industry was enacted by a Democratic legislature and governor. The principal architect was Senate President Mike Miller whose political PAC subsequently received $119,000 from the energy companies.
Mayor Martin O’Malley’s running mate, Anthony Brown, voted for the bill and O’Malley’s brother-in-law, Max Curran, sat on the Public Service Commission that blessed it. No wonder the Democrats don’t want to discuss how we got into this mess.
Instead, they’ve generated one of the greatest smoke screens in Maryland political history — they’re blaming the current Public Service Commission, appointed by Ehrlich, for the crisis.
The state Democratic Party is running radio ads blaming the rate hikes on ‘‘Bob Ehrlich’s Public Service Commission.” Leading Democrats are calling for the chairman’s ouster and Sen. Paula Hollinger (a Democrat who voted for deregulation) told the media, ‘‘If we had a Public Service Commission that wasn’t industry-driven, that was fair, that could look at the facts, we wouldn’t have the 72 percent (rate hikes).”
The Democrats’ disinformation is echoed daily by the Baltimore Sun whose anti-Ehrlich hatred has eclipsed any shred of journalistic professionalism. Everyone knows the Sun plays politics but this is disgusting. Heck, even the Sun’s ombudsman expresses concern.
Blaming the rate hike on the Public Service Commission is like blaming the Lincoln assassination on Mrs. Lincoln. She was there, why didn’t she do something? And we all know she had family members who were Confederate sympathizers!
Look, the 1999 deregulation law stripped the Public Service Commission of its rate-setting authority. Its only role was to determine the future ‘‘market rates” when the rate caps ended and that determination was made in 2003 by a Public Service Commission made up entirely of Parris Glendening’s appointees. Furthermore, the current commission met with lawmakers 22 times over the past two years updating them on the coming rate hikes. Blaming the commission is pure political scapegoating.
In olden days a red herring was used to distract hunting dogs from the trail. Blaming the Public Service Commission for deregulation is not only a red herring, it’s a public lie, which, if it doesn’t bother the Democrats and the Sun, ought to bother the voters regardless of who wins at ‘‘chicken” in Annapolis.
Blair Lee is CEO of the Lee Development Group in Silver Spring and a regular commentator for WBAL radio. His column appears Fridays in The Gazette. His e-mail address is email@example.com.