ANNAPOLIS- Electric deregulation will be the buzzword in the Statehouse today as the first round of bill hearings begins with a joint meeting of the Senate Finance and House Environmental Matters Committees.
Bills from the two most powerful politicians in the General Assembly will be among the legislation discussed. House Speaker Casper R. Taylor Jr., D-Allegany, and Senate President Thomas V. Mike Miller, D-Prince George’s, both sponsored bills that would phase in deregulation over three years, starting on July 1, 2000. The bills would freeze residential rates for four years, after which market forces would take over.
A rival legislator said the leadership bills which have industry support benefit electric companies at the peril of consumers.
Darcel Guy, spokeswoman for Baltimore Gas and Electric Company Maryland’s largest power company said her company likes the leadership bills.
“Both bills provide a strong foundation to begin debate on deregulation in earnest,” she said.
Guy said BGE’s biggest concern is to ensure that consumer protection remains in place, but the company is also concerned about taxes an issue that needs to be addressed before deregulation can occur.
“Utilities have an onerous tax burden as a result of being a regulated entity,” she said. Utilities pay taxes on 100 percent of their property, unlike other businesses.
Maryland needs electric deregulation to be competitive, Guy said. Moves toward deregulation by surrounding states, including Pennsylvania, Delaware and New Jersey, is reason enough to move forward, she said.
The second set of bills legislation that addresses environmental and consumer concerns comes from Montgomery County Democrats Sen. Brian E. Frosh and Delegate Leon G. Billings.
Billings said his bill contains conservation and renewable energy items that the speaker’s bill lacks. Another difference is how the bills handle the issue of stranded costs investments companies made in facilities that would be unprofitable in a free market. Billings’ legislation requires utilities to auction off facilities for market value, rather than letting the Public Service Commission determine the value as the Miller-Taylor bills allow.
If the facilities get top dollar in the open market, Billings said, companies won’t pass excessive stranded costs along to consumers.
Some of the differences in the bills stem from the fact that the electric industry helped draft the Miller-Taylor bills, Billings said.
“Clearly the purpose of the industry was to maximize benefits to the utility,” he said. “The purpose of our bill was to maximize benefits to ratepayers.”
Billings wouldn’t speculate on the viability of his bill, but said, “Anybody who competes with the leadership is pushing a bull up a steep hill.”
Many legislators are nervous about the leadership bills because they don’t provide enough protection for consumers, he said.
“When voters and ratepayers are (one and) the same,” Billings said, “legislators get nervous.”
The Maryland People’s Council a state agency that protects residential consumer interests in utility matters supports Billings’ legislation. In the uncertain world of deregulation, People’s Counsel Michael Travieso wants to make sure that customers who don’t choose an electric supplier can still get reasonable and reliable service and that low-income individuals will not be denied service. Travieso also wants to be sure that small businesses or communities can band together to receive a better rate, just as large businesses negotiate their rates.
“Provisions in the Frosh-Billings’ bill are much better on all of those issues,” Travieso said.
Joan Paik, president of the League of Women Voters of Maryland, said her office will support Frosh-Billings as well. Paik said that any deregulation bill should address consumer and environmental protection, areas where she feels the Miller-Taylor bills fall short.
Another piece of legislation being heard Thursday will give the General Assembly the last word on deregulation. As it stands, the Public Service Commission is set to begin deregulation on July 1, 2000.
Delegate Dan K. Morhaim, D-Baltimore County, said his bill will ensure that deregulation cannot occur without General Assembly approval. If legislation is not passed this session, Morhaim’s bill buys legislators more time.
“(Electric deregulation) should have full legislative review,” he said, “to assure that consumers are protected.”
Ray Feldmann, the governor’s press secretary, could not say which legislation the administration supports, but said that Gov. Parris N. Glendening plans to send a hand- delivered letter to the committee Thursday to voice his opinion.
Feldmann said Glendening’s biggest concern is not when deregulation happens, but how. “Yes, we have to do it,” Feldmann said, “but first and foremost, we have to do it right.” -30-