20060405 Omnibus Rolling Blackout Acts of 2006
April 5, 2006 By Kevin Dayhoff
In my Tentacle columns of April 4th, 2006 and April 5th, 2006, I referred to the “recent surge of Maryland General Assembly legislative initiatives in response to the end of the Baltimore Gas and Electric Company’s electric rate price freeze … as the “Omnibus Rolling Blackout Acts of 2006.”
Much is left to be accomplished with the time remaining in the tumultuous 421st legislative session of the Maryland General Assembly - now mercifully measured in days.
Although, for many, the 421st legislative session cannot end soon enough.
To borrow some ideas as to how to explain the bizarre 2006 session, I am reminded of a series called the “Carnival of the Clueless,” written by a freelance writer, Rick Moran.
If Mr. Moran were to be aware of the Merryland General Assembly’s operatic 2006 session deliberations and decisions, he would have a field day.
Special segments would feature the “vote early and vote often” initiative; Wal-Mart; “let’s change any law that happens to not suit us at the moment” and now, “how to cause a problem and then blame anyone else but ourselves.” A bonus feature would highlight, “how to bankrupt a public utility and encourage it to take their jobs, headquarters and business to Florida.”
My April 5th, 2006 Tentacle column explained:
“Members of the Maryland General Assembly’s leadership deserve a lifetime achievement award for ducking their responsibilities, scapegoating and obfuscating the truth in their response to the rate caps coming off Baltimore Gas and Electric as a result of the 1999 electric deregulation legislation.
“The legislative proposals, the “Omnibus Rolling Blackout Acts of 2006,” that have arrived at the governor’s desk, do nothing to address the problem of consumers facing a huge increase in their electric bills after July 1.”
It would appear that every year, the Maryland General Assembly (MGA) needs to prove to any investor owned company that anything that can possible be regulated (read, most anything that moves) in the State of Maryland is not a good investment.
One wonders that unless the MGA wants to spread its span of control across state lines and start regulating electric generation costs across the country, at some point in time, where is Maryland going to get its electricity and at what cost.
As businesses, jobs and stockholder capital continues to flee Maryland, where is the money going to come from to provide jobs for Marylanders, increase tax base – and with respect to the current cost of electricity for consumers, the power plants necessary to bring the cost of electricity down.
Forget about analogies of this august body’s cluebat populism being an opera, the machinations over the ramifications of Maryland’s California-style electric deregulation have become the stuff of an epic poem written by Franz Kafka.
If the Maryland General Assembly has its way, the sad sorry saga of how it managed to cause a problem, for which it now portrays itself as heroically punishing the victim of its folly, will be recited for the rest of millennium around the glow of candlelight.
The problem has been unfolding for almost seven years. However, just a month or so ago, as the impending reality of the rate caps coming off finally descended on the MGA; the first response by the Maryland Democratic Party was to air commercials - for battery powered radios - all across our great state that it was all Maryland Gov. Robert L. Ehrlich’s fault.
Huh? In 1999, Governor Ehrlich was not a member of the MGA.
In anticipation of this rolling black out coming our way, the Maryland General Assembly’s response has been to hold inside-baseball hearings on mythological allegations involving Governor Ehrlich’s personnel practices – at a cost of $600,000.00 and counting.
Perhaps if one tenth of the efforts to play partisan politics had been spent on addressing the issues, instead of synthetically inventing problems and making up Maryland law as they went, we wouldn’t find ourselves lighting candles to fight off the impending darkness.
In January - while the MGA was playing let’s stick it to Governor Ehrlich and Wal-Mart -the Governor was already hard a work, in anticipation of the challenges foreseen with the rate caps coming off this coming July.
In February, the governor wrote the PSC asking for a plan to protect consumers from an abrupt rise in electric rates. The PSC developed a plan that quickly got lost in the high weeds of manipulative partisan gotcha politics.
In an article, “BGE: Cap on rates may force bankruptcy,” in the Baltimore Business Journal (BBJ) on February 17, it is reflected that the Governor “wrote a letter to the Maryland Public Service Commission asking the state regulatory agency to develop a plan to give BGE customers relief from sudden price increases expected next summer.”
The Governor was reported to have written, "Unfortunately, wholesale electric supply market prices are at historic highs just as BGE's rate freeze is about to expire.”
Meanwhile WBAL reports on March 24, that Public Service Commission (PSC) chairman Kenneth Schisler “is dismissing claims by some lawmakers that they were blindsided by BGE's plans to raise rates precipitously when price caps come off in July. WBAL News has obtained records that show numerous conferences and meetings between PSC agents and lawmakers over the course of several months last year. At least 20 briefings or meetings are documented by the PSC.”
Instead of pursuing win-win solutions that will provide electric rate relief of consumers, all the while, maintaining the financial stability of the utility companies, most the of the hot air coming from the Maryland General Assembly has been political spin, in an attempt to re-write history.
In 1999, the liberal wing of the Democratic Party, consumer activists and environmental advocates did not embrace Senate Bill 300, the “Electric Utility Industry Restructuring Act.”
Then-Gov. Paris N. Glendening was skeptical to the point that he threatened a veto. In the end, it passed by such a bi-partisan majority that it was veto proof.
Writing for The Tentacle on March 17, Delegate Richard Weldon (R., Frederick and Washington Cos.) identified the main protagonists of the legislation accurately and succinctly: “Speaker Michael Busch (D., Anne Arundel) was then the chairman of the Economic Matters Committee. The bill was co-sponsored by the two most powerful members of the Maryland Senate, President Mike Miller (D., PG) and Sen. Thomas Bromwell (D., Baltimore Co.). Senator Bromwell chaired the Finance Committee, the committee that deals with utility regulation in the Senate.”
To make matters worse, in 2000 the MGA required Baltimore Gas and Electric (BGE) to divest itself of its power plants and forced the utility to sell electricity on the national open market – where, incidentally, it could sell it for higher prices as the price of power plant fuels continued to skyrocket. Read Jay Hancock’s March 12 article in the Baltimore Sun: “Maryland, Michigan take diverging paths in deregulation.”
In an article, “BGE: Cap on rates may force bankruptcy,” in the Baltimore Business Journal (BBJ) on February 17, Wayne Harbaugh, Baltimore Gas and Electric’s (BGE) manager for pricing and regulatory services was quoted: “Our residential customers have been enjoying six years of price freeze service as electricity prices have been ramping up elsewhere in the country….”
In the same Baltimore Business Journal article, Kenneth W. DeFontes Jr., president of BGE, shed some light on the issues by saying “that much like a gas station owner shouldn't be blamed for higher fuel costs, high power prices are out of BGE's control.”
Isn’t it odd, that it has been inadequately reported that the PSC followed the 1999 deregulation law in overseeing the 72 percent rate increase by following regulations that “were (subsequently) approved by the Democratic-appointed members of the PSC and the Democratic-appointed People’s Counsel…,” according to Barry Rascovar writing in the Gazette on March 31.
Isn’t it odd, that in the March 18 front page story by the Baltimore Sun, detailing an in-depth review of PSC chairman Shisler’s emails, that the Sun was not able to “discover” that the chairman had been working on the impact of the rate caps coming off and keeping lawmakers informed.
For context, one wonders why the political writers of the Sun has never looked in depth to the money trail, emails and correspondence between liberal lawmakers and Giant Food or the unions that essentially wrote the Wal-Mart legislation.
At this time, after sine die next Monday, April 10, the leadership of the Maryland Democratic Party will all stop by the local hardware store and buy an electric generator.
Once they are home, they will develop even more misinformation by the glow of candlelight and the political writers for the Baltimore Sun to repeat as fact.
The political writers at the largest newspaper in Maryland are doing what they can to be the Web site for this sordid political blame game. This is a gross disservice to citizens they serve, who ultimately will have to pay for partisan politics trumping substantive leadership.
Apparently, it is just a rumor that the Maryland Democratic Party will soon be rolling out a new line of candles for this summer’s campaigning.
Forget the candles, it has been reported that rolled-up old newspapers burn brightly and provide a good source of populist artificial heat. It’ll get ya through the night, but in the morning it will back to cold reality.
In the end, all hopes that the MGA will provide a win-win solution the impending rise to the cost of electricity have resulted in a blown fuse. The governor must veto the current legislation on the table that will ultimately bankrupt the electric utilities and provide no relief to electric ratepayers.
Writing in The Gazette on March 31, Blair Lee nailed it: “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.”
Playing chicken with an increased cost of electricity is not viable for either party in the context of the higher gas prices, mortgage costs, heating oil and property taxes - and growing voter intolerance to all the inside baseball childish bickering.
As the lights go dark on the Merryland General Assembly, the lighters held high in the air are not in honor of Bob Dylan, but rather by members of the leadership of the Maryland General Assembly trying to find their way out of a dark building.
Once again, we’re depending on Maryland Governor Robert L. Ehrlich to come through for the citizens of Maryland.
Electric Deregulation
Kevin Dayhoff writes from Westminster Maryland USA.
E-mail him at: kdayhoff AT carr.org
####
