Let?s recap what Maryland?s current political leaders said and did in the past two years with regard to rising electricity rates in the Baltimore area. And let?s assess whether they kept their commitments. Granted, the real answer lies in our BG&E bill each month, but the context should not be overlooked.
First, electricity rates for BG&E are roughly 85 percent higher today than they were two years ago. This is despite the fact that then-Baltimore Mayor Martin O?Malley promised in campaign ads in 2006 to “stop the 72 percent rate hikes” most informed individuals knew could not be legally prevented. Of course, the promise was not kept, and prices increased another 13 percent since O?Malley took office.
Second, we learned in April 2008 that the state?s Energy Assistance Program will be $21 million over budget because of high demand from low-income residents needing help with electricity bills. If you still believe that Maryland?s current political leaders have a firm grip on electricity costs and their impact on the vulnerable, here are 21 million reasons why they don?t.
Third, BG&E announced in April 2008 that rates will increase another 8 percent this summer on top of the 85 percent we are already paying. These rate increases were approved by O?Malley?s Public Service Commission, whose chairman received a $68,000 pay raise from Gov. O?Malley just as the steepest rate increases were taking effect.That same PSC chairman resigned last month.
Fourth, this year O?Malley administration officials announced a legal settlement with Constellation Energy (BG&E?s parent company) that they claimed provided BG&E customers with a one-time $170 credit. In reality, the additional 8 percent increase wipes out any minor relief from the credit.
Fifth, within days of the settlement, the new “consumer friendly” O?Malley Public Service Commission disclosed its high-profile investigation into Constellation?s 2005-2006 power auctions found no wrongdoing. The finding exonerated the former chairman of the Public Service Commission, Kenneth Schisler, and debunked the vitriolic criticisms heaped upon him by the then-Baltimore Mayor O?Malley and state Senate President Thomas V. Mike Miller, the chief architect of the 1999 deregulation plan that caused the rate hikes in the first place. Let?s not forget that it was Sen. Miller who famously declared in 1999 that “prices will go down. No ifs, ands or buts.”
Sixth, Gov. O?Malley introduced electricity proposals in February 2008 that his own Public Service Commission acknowledged would increase electricity costs for Marylanders. His allies in the legislature quickly killed the proposals most expensive for ratepayers.
Back in 2006, when the 72 percent increase was announced, Maryland?s elected officials faced a major challenge in a campaign year. I know, because I served in the Cabinet of Gov. Robert Ehrlich at the time. The rate increase was the result of the Maryland General Assembly?s flawed deregulation plan in 1999, but the times called for an honest appraisal of potential remedies by Republicans and Democrats alike. The Ehrlich administration presented such a plan, one that included $600 million in consumer benefits. The General Assembly rejected it, choosing instead to postpone the 72 percent rate increases until after they were re-elected.
Tragically, electricity prices are only one daunting expense facing today?s low-income Marylanders. They must also grapple with rising food prices, inflation, a higher sales tax and skyrocketing gasoline prices. The solution may be politically painful, but it is unavoidable: Our elected officials ? at all levels of government ? must be forthright about the costs of deregulating and diversifying Maryland?s energy portfolio. Doing so will be difficult, but honest dialogue between elected leaders and the public will make it less daunting. As General Electric?s Jack Welch once said: “Be candid with everyone.”
Two years after the BG&E debate, the report card does not bode well for Annapolis. Marylanders continue to pay hand over fist, while political promises go unfulfilled. Let us all hope that Maryland?s governing majority will spend less time making promises and more time respecting the wallets of working Marylanders.
