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Ehrlich, Elections, and Electricity Reprise

Posted by David Keelan on Wednesday, May 30, 2007

I have been thinking it and started a post on it.  Then the MD GOP sent this out.  I could not have said it any better.

O’Malley yelled at the top of his lungs on the looming 72% electric rate increases (despite the fact that Ehrlich had nothing to do with it except try to fix it then O’Malley blew that apart).  Now the O’Malley is singing from the same sheet of music as the Ehrlich Administration sang from.  Thing is O’Malley had a copy of the sheet of music before the election because he knew he would have to use it himself.

Now perhaps O’Malley is looking at the $23.7M in taxes that BGE paid to Maryland in 2006 (not to mention Constellation Energy’s state tax bill).  Since a great deal of this tax bill is based upon gross receipts (some is based on property and other items) perhaps Mr. O’Malley sees this as a hidden tax to help with the State’s revenue problems.

Maybe County Executive Ulman will push forward his energy co-op plan.  For those of you waiting for me to bash Mr. Ulman I am not being tongue in cheek –  I am serious.

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DESPITE PROMISES TO “STOP THE RATE HIKES,” ELECTRIC RATES ARE GOING UP BY OVER 50% ON JUNE 1ST

THEN – Candidate O’Malley Promised Immediate Relief From Electric Rate Hikes.  “Martin O’Malley and Anthony Brown will work to provide immediate relief from the impending rate hikes for our families, small businesses and the most vulnerable in our communities.”  (O’Malley Campaign Web site, http://www.martinomalley.com/content/591, accessed May 28, 2007)

THEN – Candidate O’Malley Promised To “Stop The Rate Hikes.”  “‘The special interests already have their governor – we need one of our own,’ says a voice-over in the mayor’s commercial. ‘Martin O’Malley: taking on BGE to stop the rate hikes.’”  (David Abrams, “Politicos jockey for credit on BGE rate deal,” The Capital, 6/25/06)(emphasis added)

NOW – Governor O’Malley Announced His Hand-Picked Public Service Commission Has Approved The Largest Electric Rate Increase in Maryland History – Going Up Over 50% For The Average BGE Customer on June 1st.  “It is with reluctance, but with little legal option, that the Commission in this Order approves the approximately 50 percent rate increase resulting from a pass-through of supply costs proposed by BGE for its electric residential customers receiving its Standard Offer Service.”  (Public Service Commission Order, 5/23/07)

Ø      SENIORS AND LOW-INCOME FAMILIES FORGOTTEN

THEN – Candidate O’Malley Promised To Protect Seniors and Low-Income Families From Any Electric Rate Increase.  “O’Malley will also work to ensure that all residents are automatically enrolled in the shock absorber plan, and not be subject to an opt-in provision that disproportionately harms seniors and low-income Marylanders.” (O’Malley Campaign Web site, http://www.martinomalley.com/content/591 , accessed May 28, 2007)

NOW – The O’Malley Administration Says There Is Nothing They Can Do To Help Seniors and Low-Income Families.  “[Public Service] Commission Chairman Steven B. Larsen said he had concerns about the effect of the increase on people with low incomes, but he said the commission had no legal basis to deny the increase as Maryland transitions to market prices after years of capped rates.”  (John Wagner and Avis Thomas-Lester, “BGE Customers to Face Heftier Energy Bills in June,” Washington Post, 5/24/07)

In Contrast, Governor Bob Ehrlich Reached Agreement For Over $600 Million In Assistance For Marylanders Hit Hardest By An Electric Rate Increase, But A Lawsuit From O’Malley Killed The Deal.  “ Due to Baltimore City’s interference, more than one million Marylanders were saddled last week with an electric rate stabilization plan that includes far less assistance than the plan negotiated with Baltimore Gas & Electric and Constellation Energy in April and includes no concessions whatsoever from energy companies for working families. This unfortunate development resulted from the Baltimore City Administration’s lawsuit against the Public Service Commission, which had previously approved a plan that offered customers far more assistance…I introduced a plan that reflected our basic agreement and included $600 million in cash relief from Constellation Energy for working families to help offset the large rate increase resulting from the flawed 1999 deregulation law. The City’s lawsuit effectively voided these benefits and stuck working families with a plan that benefits energy companies more than customers.” (Governor Robert Ehrlich, Letter to Senate President Thomas V. Mike Miller and House Speaker Michael E. Busch, 6/5/06)Ø      CONSUMER ADVOCATES NOT APPOINTED TO THE PUBLIC SERVICE COMMISSION

THEN – Candidate O’Malley Promised to Replace the Public Service Commission With Advocates For Consumers.  “Replace PSC Members: Install Advocate for Consumers in Negotiations. O’Malley will support measures that will immediately get new, independent, competent regulators on the job – replacing the existing industry-dominated PSC.”  (O’Malley Campaign Web site, http://www.martinomalley.com/content/591, accessed May 28, 2007)

  • Candidate O’Malley Accused PSC Of Not Doing Enough To Shield Consumers From Rate Increases.  “Baltimore Mayor Martin O’Malley, a Democratic candidate for governor, yesterday called for commission Chairman Kenneth D. Schisler to resign, saying he and other Ehrlich appointees aren’t doing enough to shield consumers from the rate increases.” (Andrew Green, “Former industry leaders regulating state utilities,” Baltimore Sun, 3/14/06)

NOW – Governor O’Malley Appointed Public Service Commissioners With No History of Consumer Activism.  “(Governor O’Malley) named two commissioners (to fill vacant slots) who lack a history of zealous consumer activism.”  (Barry Rascovar, “O’Malley’s reality check: Power has limits,” The Gazette, 2/23/07)

  • New Chairman Has No Background in Utility Regulation.  “O’Malley’s choice for PSC chairman, Steve Larsen, has no background in utility regulation, which mocks the governor’s pledge to select commissioners with expertise in this arcane and complex field.”  (Barry Rascovar, “O’Malley’s reality check: Power has limits,” The Gazette, 2/23/07)
  • Former Commissioner Who Approved The Failed 1999 Deregulation Plan Added To PSC.  “(Governor O’Malley’s) other ‘new’ commissioner, Suzanne Brogan, is actually a retread and was one of the members who approved electric rate deregulation in 1999 — a move O’Malley and other Democrats loudly denounced as anti-consumer.”  (Barry Rascovar, “O’Malley’s reality check: Power has limits,” The Gazette, 2/23/07)
  • Constellation Energy Executive Re-Appointed To PSC.  “To top off his PSC moves, (Governor O’Malley) reappointed Harold Williams to another five-year term, even though he worked nearly 20 years for the Evil Empire of state utilities, Constellation Energy.”  (Barry Rascovar, “O’Malley’s reality check: Power has limits,” The Gazette, 2/23/07)

Ø      O’MALLEY HAS FAILED TO ACT

THEN – Candidate O’Malley Criticized Then-Governor Ehrlich For Allegedly Failing to Act.  “O’Malley said the governor and the PSC members he appointed failed to act and hold hearings as they should have to hold down BGE rates. ‘The governor should have stepped up and done something,’ O’Malley said.”  (Len Lazarick, “Ehrlich, O’Malley debate electric rates, PSC,” The Examiner Washington, Sept. 15, 2006)

NOW – Governor O’Malley Has Failed To Act.  “ During last year’s campaign, O’Malley accused the commission, which then had a majority of Ehrlich appointees, of ‘rubber-stamping’ BGE’s rate request. Yesterday, the tables were turned.  ‘O’Malley’s pledge to hold the line on rate increases and help working families was a false campaign promise,’ state GOP Chairman James Pelura said in a statement.  ‘His lack of visibility on this issue shows he will do and say whatever it takes to get elected.’”  (John Wagner and Avis Thomas-Lester, “BGE Customers to Face Heftier Energy Bills in June,” Washington Post, 5/24/07)

NOW – On June 1st, Electric Rates Will Go Up By 50% For BGE Customers.  “State officials reluctantly approved a 50 percent rate increase yesterday for the 1.1 million residential customers of Baltimore Gas and Electric Co., saying they had “little legal option” to defer or reduce the utility company’s proposal.  The increase goes into effect June 1.”  (Brian Witte, “Officials Approve BGE’s Increase,” Washington Times, 5/24/07)(emphasis added)

Posted in BGE, Democrats, O'Malley | 8 Comments »

Constellation, FPL kill planned merger

Posted by David Keelan on Wednesday, October 25, 2006

The Story

I am going to wait and see how the markets react. 

My prediction is FPL stock price goes up and Constellation’s goes down and their credit rating will be further downgraded.

Posted in BGE, Maryland | 3 Comments »

General Assembly Whacked Again

Posted by David Keelan on Thursday, September 14, 2006

The Courts struck down the General Assembly attempt to fire the PSC as illegal and unconstitutional.  No one is going to jail of course (though maybe we should consider it).

This has got to be tiring for Senate President Mike Miller.  Once again in his blind ambition to whack Governor Bob Ehrlich he got whacked himself.  Three major bills (Wal Mart “Fair Shair Health Care Bill, and early voting, and now this).

I think that the General Assembly could have accomplished what it wanted  if they had worked with the adminstration to write with clean legislation but they were determined to run rough shod over Ehrlich and flex their muscle in public.  Instead they are repeatedly embarassed in court and the papers.

If they really wanted to accomplish marquee legislation then why couldn’t they come up with something that would stand up in court?  I don’t believe that they had the time nor the inclination to do so because they were more focused on getting Ehrlich.  Even the Court opinion says Senate Bill 1 only applied to Bob Ehrlich.

The Bill then provided that at the next round of appointments of Commissioners the statute would automatically revert back to its prior configura tion (as to the appointment of Commissioners) and whoever was Governor at that particu lar time would have the same duties and responsibilities the Governor had on January 1, 2006. In other words, the statute would, in essence, only apply to the present Governor.

Now of course the spin continues to be that the PSC and Ehrlich are responsible for the 72% rate hikes even though none of these people were around when Miller pushed deregulation through 7 years ago.  Capping rates was a great idea.  However, he lost the bet.  Capping rates stymied competition and the market prices went the wrong way.  In the Court’s own words:

The situation arose from legislation enacted by the General Assembly in 1999 that partially deregulate d the electricity industry in Maryland. The General Assembly concluded that, by allowing electricity rates to be governed by market forces rather than through the “guarded monopoly” approach that had served the State so well for more than 80 years, competition would keep rates at a reasonable level and promote efficiency and better service.  See Delmarva Power v. P.S.C., 370 Md. 1, 803 A.2 d 460 (20 02). Reco gnizing tha t it would take some time for the anticipated competition to take hold, however, and unwilling to allow rates to float unre gulated in th e interim, the L egislature req uired that rates be “capped” at their then-current level until July 1, 2006, after which that part of the rates based on the cost of generating and transmitting electricity would become unregulated by the PSC. When the “caps” were abo ut to expire, however, it was clear th at the anticipated competition, upon which the Legislature relied, had not occurred, and some of the utilities that had spun off their generating facilities and would be forced to purchase electricity in the open market, announced that, effective July 1, 2006, electricity rates would increase significantly, in the case of BGE by 72%

 Anyway it goes on and on for 126 pages and lashes out at the Senate for even considering such bad legislation.

The entire opinion can be read here.

Posted in BGE, General Assembly, Maryland | 2 Comments »

Maryland utilities designated near junk

Posted by David Keelan on Friday, July 14, 2006

By Patrice Hill
THE WASHINGTON TIMES
July 12, 2006

A top Wall Street credit agency yesterday downgraded Pepco, Baltimore Gas and Electric Co. and Delmarva Power to close to junk status, citing their inability to pass along higher energy costs in a hostile political environment. Read the rest of this entry »

Posted in BGE | 1 Comment »

Moody’s lowers BGE’s credit rating

Posted by David Keelan on Wednesday, July 12, 2006

Hmmmm.  Who would have thunk…

A friend of mine at BSG is thinking of leaving.  He says, with all this crap going on they see further pressures on the company’s financials and that BGE will be forced to cut heads. 

Question: If revenues are falling how do you keep up profits? 

Answer:  Cut expenses. 

Thank you Mr. Miller and Mr. Busch.
Downgrade is linked to rate relief

By Paul Adams
Sun reporter
July 12, 2006

Moody’s Investors Service downgraded the credit rating of Baltimore Gas and
Electric Co. yesterday in response to concerns about the Maryland legislature’s
recent actions to soften the blow of a 72 percent rate increase and fire the
state’s five-member utility commission.

Posted in BGE | 8 Comments »

Governor Crothers, Meet Dan Rodricks

Posted by David Keelan on Thursday, July 6, 2006

Check out this very interesting post from “The Sun Lies”.

Posted in BGE, Democrats, General Assembly, Maryland | Leave a Comment »

Blair Lee on BGE

Posted by David Keelan on Saturday, June 17, 2006

Lawmaker’s Slay Rate Hike Dragon By Blair Lee – The Gazette

The bill that wound its way through the state legislature’s special session was the incumbents’ latest attempt at saving their skins. Otherwise 1 million Baltimore area utility customers would have suffered a 72 percent rate hike two months before primary election day. The new relief measure, cooked up by the legislature’s Democratic majority, is primarily designed to quell a voter rebellion by softening the 72 percent rate hit to 15 percent, at least through November. To rest the rest of the article – Click here

Posted in BGE | Leave a Comment »

Ehrlich Elections and Electricity

Posted by David Keelan on Thursday, June 15, 2006

The legislature didn't deliver the committee bill to their republican colleagues until two hours before floor discussion and voting.  The Governor's office got it one hour before.  Mike Busch met with the Governor early in the week where the Governor told Bush he was looking forward to working with the General Assembly.  Busch's response was akin to "Don't call us kid.  We'll call you."  Then I read O'Malley's accusation that the Governor wasn't involved and proposed no ideas of his own.  Excuse me MOM – didn't you have his ideas shot down in court?  I think Busch and Miller knew the Governor's mind on this issue.

From an article in the Baltimore Sun:

One of Ehrlich's prospective opponents, Baltimore Mayor Martin O'Malley came to Annapolis last night to watch the final votes in the House of Delegates. O'Malley has already begun running campaign commercials on television spotlighting his efforts to secure rate relief.

He said it isn't surprising that Ehrlich wasn't involved in crafting any of the legislation in the special session and proposed no ideas of his own.

"He's not a person that's as committed to finding solutions as he is to casting aspersions and trying to divide and belittle those that would try to make government work," O'Malley said.

Nice sound bite Mr. Mayor.

Now here is the Governor of the State of Maryland who calls a special session of the General Assembly to address this issue after O'Malley blew up the last plan.  What did we get – nothing.

As Blair Lee put it…  How do all the competing plans differ?

They don’t, really. Basically they are all rate-deferral plans, not rate reduction plans. BGE has a right to pass through to customers its costs for energy plus a reasonable profit. Unfortunately, starting July 1, the market cost of energy is 72 percent more than what ratepayers have enjoyed under the six-year rate caps.

Each of the plans simply lowers the 72 percent in the early months but requires customers to make up the difference later. The only true relief is the $600 million Constellation is contributing from its FPL merger savings but all the plans include that feature.

Now O'Malley accuses the Governor of a lack of intrest in the legislative process.  O'Malley wanted public hearings?  Good, Ehrlich is going to deliver.  Ehrlich plans public hearing on BGE rate bill.  This time the Governor will be holding the hearings and the agenda.  This could back fire on him, but I don't think so.  I think we are going to find out that rate payers and voters are a lot more sophisticated than the very comfortable fat cats in control of the General Assembly give them credit for.

I don't know why FPL wants to buy Constellation now, and I don't know why Constellation would stick around Maryland anyway.  The anti-capitalist, anti-market socialists in control of the General Assembly wouldn't give a shake if they just walked away from Maryland with the horse racing industry, Wal-Mart …

188 seats up for grabs.  Lets create a real two party system.

The Sun Lies had this perspective:

In an article dealing with the legislature adopting a plan that appears worse than the original Ehrlich plan (see charge comparison http://www.baltimoresun.com/media/graphic/2006-06/23903673.gif) The Sun decided to conclude on a note quoting Mayor O’Malley?  Not only is this following the ‘happy endings’ trend that we’ve pointed out, but Mayor O’Malley is largely irrelevant to the legislative process here except in his wishes to be Governor.  We can’t figure out why a suitable quote from Governor Ehrlich, Speaker Busch, President Miller, or BGE/Constellation officials was unavailble?

Posted in BGE, Ehrlich, Maryland | 2 Comments »

Political Insurance – The General Assembly and BGE

Posted by David Keelan on Wednesday, June 14, 2006

Just absolutely nuts…

Political insurance

In their electricity bill, Democrats installed several wonderful booby traps in case Republicans try to attack the measure outside the legislature after it's passed.

1) Section 19, paragraph 5: "No State funds may be spent directly or indirectly by any officer or unit of State government to challenge any portion of this Act, in a State court or federal court." This would apply to an officer of state government with the name of — to pick a random example — Gov. Robert L. Ehrlich Jr.

2) Section 19, paragraph 1. If any action is brought to challenge the constitutionality or legality of the act, "The action shall be filed in the Circuit Court of Baltimore City. That will keep Public Service Commission Chairman Ken Schisler from filing a suit with a friendly judge on his Eastern Shore stomping grounds, as he has already done

3) The new proposed method of naming PSC commissioners would have the governor choose from a list furnished by the legislature (Section 12). But this just might be unconstitutional! (It could be a separation-of-powers issue, giving the assembly too much control over the executive branch.) If so, not a problem. See Section 22, which lets the attorney general (who's elected separately from the governor) name the PSC if courts block the other plan. Jay Hancock is a business columnist for The Baltimore Sun.

Posted in BGE, General Assembly | 2 Comments »

Ehrlich to call special session on energy rates

Posted by David Keelan on Tuesday, June 6, 2006

Talk about Groundhog Day (one of my favorite movies).

From the Washington Times

I think that Miller and Busch are going to take every opportunity to abuse Ehrlich.

On March 28th the Washington Times had reported

Gov. Robert L. Ehrlich Jr. yesterday accused lawmakers of ignoring a statewide crisis of escalating electric bills while they move to block a multibillion-dollar merger that would affect only Baltimore Gas & Electric Co. (BGE) customers. 
"The House [of Delegates] has lost focus and is now focused on a merger that only affects 20 percent of Marylanders," Ehrlich spokesman Henry P. Fawell said. "All Marylanders deserve access to affordable electricity, whether they are customers of BGE or not."

Other than to say "I gave it my best shot and your boy mayor shot it down now it is your turn" I don't know what is going to come out of this.  I suppose he is putting the mess back into their hands – after all they created the mess.
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Posted in BGE, Ehrlich, General Assembly | Leave a Comment »