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- A Static Charge in Annapolis?
This article is being written as the legislators file back to Annapolis for a Special June Session called by Governor Bob Ehrlich to deal with the Electrical rate increases. This is just after a long and contentious 2006 legislative session that ended in early April with the failure of all sides to solve the rate crisis.
The switch was flipped “on” with the combined end of the rate stabilization plan, or caps on increases put into place during 1999 session and signed by then Governor Parris Glendening (D). In exchange for six years of rate caps, the Legislature gave BG&E a pass on the $568 million dollars in “stranded” costs that the company owed the State. The State felt that the 1999 deregulation bill would increase competition and rates would ultimately fall even below the capped rates. The reverse happened. Because the rates were capped so low, no other new companies were willing to come into the Maryland market and sell their energy at the rates mandated by the State. So when everyone woke up this year with the rates coming off, they looked around for competition, and saw none. Instead, Florida Power and Light, made an offer to gobble up BG&E which was in turn swallowed a few years back by Constellation Energy.
The live wire question is who should have seen the light sooner that the deregulated rates were about to blow fuses in most Maryland households. The Ehrlich Administration points to the Democratically controlled Governor’s Mansion and Legislature that fashioned the law in 1999 and says they are the one’s that laid the mine field. The Democrats say the Governor knew about this since he was elected in 2002 and did nothing to reopen the rate debate that would explode during his Administration once it was clear that competition was not happening. They say he appointed “lap dogs” of the energy industry to the PSC.
These issues will resolve themselves for better or worse when the Legislature attempts to pass legislation that will cap any increases for BG&E customers to 15% starting July 1, 2006 and be frozen for 11 months. Pepco will be allowed to purchase energy in smaller quantities at energy auctions that have resulted in lower consumer rates in the District of Columbia. The argument is that Pepco should be authorized to do the same for its Maryland customers and save them money too.
On top of all of this, the legislation will allow the legislature to “fire” the current PSC commissioners (4 of the 5 have been appointed by Governor Ehrlich) and create a list of new Commissioners that will require formal appointment by the Governor. The provision was bolstered by Mayor Martin O’Malley’s lawsuit that was sustained by a Baltimore Circuit Court Judge indicating that the PSC must take evidence to justify the 72% increase and not just rubber stamp what BG&E claims its entitled to.
The entire legislation, as currently drafted, if passed, is subject to the Governor’s veto. However, as has happened to this Governor more than any other, the Democratic leadership is busy whipping their flock to support the bill and vote to override the Governor’s veto, so they can claim to the electorate that they fought for lower rates, not the Governor who supported less concessions from BG&E. Either way, whether the Governor is successful in “pinning the donkey” on the Democrats with the BG&E fiasco, or the Democrats portraying the Administration and BG&E as tight as a coaxial cable supplied by the PSC, there will be plenty of political “spin” for both sides to use.
The next political shoe to drop will be Governor Ehrlich’s announcement of a running mate for Lt. Governor to fill the void left when Lt. Gov. Michael Steele announced his candidacy for the U.S. Senate. The filing deadline is July 3rd so stay tuned. Whispers from the insiders say it must be a woman, preferably from the center of the State, so the names of Senator Sandy Schrader (Howard County) as well as Maryland Transportation Administration Director, Trent Kittleman, wife of the late titular head of the Republican Party and popular State Senator from Howard County, Bob Kittleman, are on the short list with others such as Kristin Cox, who is blind and head of State Disabilities Department.
Governor Ehrlich will have at least $10 million to defend in this Governor’s race. The question will be how much money will the Democratic candidates, Doug Duncan and Martin O’Malley, burn through to get to the September primary and will there be enough to wage a credible fight against the incumbent? Duncan has been forced to go to the bank early in an effort to close the name recognition gap with O’Malley by going on Baltimore TV and there are signs that he has narrowed the gap with O’Malley.
While Duncan has come out swinging against O’Malley’s efforts on crime and education in Baltimore, Duncan has fallen victim to some events of his own doing. The development fiasco of Clarksburg in Montgomery County even had the O’Malley-Brown ticket campaigning there last week criticizing the development and fanning the fires of anti-Duncan sentiment. Additionally, the fact that Duncan received over $20,000 from disgraced lobbyist Jack Abramoff, to establish a religious school contrary to the wishes of the neighbors and Duncan weighed in favor of the development has hurt him in his own county. It is just this week that Duncan has admitted it was an oversight and returned the Abramoff campaign money. O’Malley and Brown have appeared better organized, more substantive on the issues and are still favored to win the Democratic Primary.
Other races of note are the Attorney General’s race with the retirement of Joe Curran after serving 20 years in that position. The popular Montgomery County State’s Attorney, Doug Gansler, has amassed much name recognition, after his office was intimately involved in the capture of the Washington Snipers and just last month obtained 6 life sentences for John Mohammed using the testimony of Lee Boyd Malvo. Gansler is running in the Democratic Primary and has drawn the attention of Montgomery County Councilman Tom Perez into the race. Perez is a former U.S. Attorney and has deep ties to the Hispanic and minority communities. The Democratic nominee will face the popular Frederick County State’s Attorney, Scott Rolle, who developed an independent streak and went against the Republican establishment and took on Congressman Roscoe Bartlett in the 2004 Republican Primary. While Rolle failed to unseat Bartlett, his style gained recognition among the party faithful as a future star of the Party.
One of the more interesting races to watch will be that of the Comptroller’s race as former Governor, Mayor, Councilman and now Comptroller William Donald Schaefer seeks re-election at age 84. He has not been in peak health of late, but that has not halted his irascible style at the Board of Public Works meetings. Schaefer has recently drawn attention to himself by his comments about women and Hispanics almost universally decried by all, including Governor Ehrlich, as insensitive.
Other candidates include 20-year House of Delegates veteran and budget guru and Chair of the Appropriations Transportation Committee, Peter Franchot, and retiring Anne Arundel County Executive Janet Owens who recently entered the race. The importance of the Board of Public Works is that it is the State Body that gives approval to all contracts with the State that are $100,000 or more. In addition to the Comptroller being one of the 3 votes on the Board, the Governor and State Treasurer Nancy Kopp are the other two votes. The Republicans are not given much of a chance of an upset here.
There are 188 Senate and House seats up for grabs. While space and time don’t permit a recitation of the races (maybe the next issue we will focus on that), it is possible that the dominance of Senate President Mike Miller might be challenged in a primary. Rumors have former Prince George’s County Executive Wayne Curry looking closely at that race. Speaker of the House Mike Busch has been targeted by the Republicans in his District 30 race and that has the Speaker out door-knocking his District the last few weeks heading into the Special Session.
The issues of electricity and energy dependence will now dominate the remaining campaign days as well as the old war horses of taxes, education, transportation, environment, crime and not to be forgotten, slots. Prediction --- slots will come to Maryland, in some form, in the next Administration, whichever one it is.
There’s the old adage that “the more things change, the more they stay the same.” Maybe 2006 will be different. By your participation in the process, you can make a difference --- and things won’t have to be the same after 2006.
On behalf of my partner, Don Murphy, we are honored to continue to serve you in Annapolis and welcome your presence anytime. Have a great summer!
Gil Genn
Genn & Murphy, LLC
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