ANNAPOLIS – As the governor and legislative leaders neared a deal that would ease the impact of coming Baltimore Gas and Electric Co. rate increases, legislators stepped up pressure on the utility Thursday by enacting a bill giving the General Assembly the right to veto a planned merger.
A solution to the crisis brought on by an average 72 percent rate increase should be reached in the next 10 days, Gov. Robert L. Ehrlich Jr. said following an afternoon meeting with BGE representatives and legislative leaders. He said that “there’s no excuse” to extend negotiations beyond the 90-day legislative session.
“We are substantially down the road from where we were 72 hours ago,” he said.
His remarks came several hours after the Senate passed a bill which, if signed into law, would give General Assembly the authority to disapprove the planned merger between BGE’s parent company, Constellation Energy, and Florida’s FPL Group.
Ehrlich, who has said repeatedly that the merger is “good for the state,” called the merger oversight bill “legislative intrusion into the executive branch.”
The governor did not explicitly say that he would veto the bill, but voiced strong disapproval for it and other “collateral bills.”
Constellation has questioned the legality of giving the General Assembly the authority to block the merger and has threatened to sue in the event that the merger is put on hold.
Constellation spokesman Robert L. Gould said that the fact that the merger “is subject to an up-or-down popularity vote” was “extremely troublesome.”
“We’re just considering all our options, including the legal route,” he said.
Senate President Thomas V. Mike Miller Jr., D-Southern Maryland, acknowledged that the merger veto is something of a bargaining chip with Constellation. He said that the company needs to come to the table with a plan that provides more relief and is easier for customers to understand.
Miller said that another bill on the Legislature’s agenda, this one to reorganize the state’s utility regulator, the Public Service Commission, is also providing needed leverage in negotiations with Constellation.
“I think they (Constellation) are more concerned about the Public Service Commission bill. They think they own the Public Service Commission,” he said. “They’re scared.”
The merger bill, which the Senate passed in a 39-7 vote, would create an Office of Special Counsel to investigate the merger and report back to the legislature. It would also restrict any member of the special counsel or the PSC from holding any monetary stake in a public utility.
The merger would not be allowed to take place before April 10, 2007, even if the Legislature approves it.
Sen. Paul G. Pinsky, D-Prince George’s, urged passage of the bill, saying that the legislature was deceived by energy interests – including representatives of Enron Corp. – when deregulation was passed in 1999.
“They were trying to tell us it was chicken salad when it was chicken waste,” he said.
One of the seven Republicans to vote against the bill, Sen. David R. Brinkley of Frederick, said that the crisis has chiefly come from BGE’s “poor P.R. performance” and that passing the bill will make Maryland seem less welcoming to businesses.
Following a meeting Thursday afternoon in the governor’s office with Ehrlich, Miller, House Speaker Michael E. Busch, D-Anne Arundel, and other legislators, Mayo A. Shattuck III, Constellation’s chief executive officer, said that a plan previously offered by the utility to limit to the initial rate increase to 15 percent is still on the table. But he said the timing of additional increases in still undecided.
“The timeline’s still under debate,” he said.
Busch, who left the meeting nearly an hour before the governor and Constellation’s representatives, did not comment on the negotiations beyond saying that they were productive. Ehrlich declined to discuss the details of the talks, but said that “proposals were offered by respective parties.” He did say, however, that “the dollars associated with the merger” had been a major part of the discussion.” -30- 03