Friday, June 09, 2006

Ehrlich Right O'Malley Wrong On Electricity Rates

Maryland Governor Robert Ehrlich had the best plan for the unavoidable BG&E rate hike: spread the pain out over time. Baltimore Mayor and gubernatorial candidate Martin O'Malley sued and a judge has sent all parties back to the negotiating table. Now Governor Ehrlich has called a special session of the Maryland Legislature to give it another try. We can't remember the last time there was such a special session. They will ultimately come up with the same plan Governor Ehrlich already devised but it is an election year, so grandstanding will be plentiful.

Energy price increases are like kryptonite to policians and renders them vulnerable to being blamed by the voters for the hikes. Of course, ratepayers have to pay their electricity bills so why not blame some politicians. Politicians put BG&E in this predicament a decade ago by designing a flawed deregulation plan that included a provision to freeze the rates for about a decade. THAT ISN'T DEREGULATION. Now the chickens are coming home to roost. And BG&E's parent, Constellation, is having trouble with its proposed merger with Florida Power and Light because of the confusion over the rate increase. Some legislators even wanted to hold the merger hostage to the rate increase issue. Maryland ratepayers are left to pay a 72% increase now or agree to three smaller payment increases over about two years. This was Governor Ehrlich's plan and he got it right. But his success could not be allowed to stand during an election year.

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