ELECTRICITY RATE INCREASE & MOUNTING STATE DEBT: WHERE'S THE LEADERSHIP? This week , Maryland citizens / taxpayers have received BGE bills that were recently described , by The Baltimore Sun, as having "arrived quietly" . Rates go up 50% for all households and individuals, unless a "delay on the full amount, but pay the balance later" option is exercised by BGE customers . As this commentary is written, Gov. Martin O'Malley is campaigning in New Hampshire for candidate Hillary Clinton. Comptroller Peter Franchot is speaking out for more expenditures in public transportation/teacher salaries/healthcare benefits --- but appearing as "looking the other way" from the highest responsibility of the Comptroller: to insure sufficient revenue and its collection.

And, to top it all: the role of the Public Service Commission (PSC) in the current electricity rate increase, adding to create a "double hit " on Marylanders if we take into account the O'Malley Adminsitration and the Legislature's delay in reducing the $ 1.6 billion Maryland debt. What insight do we gain on the 2nd floor and the Governor's offices during this "double hit" ?

Let's put the Public Service Commission under the microscope: In the 2006 campaign, O'Malley lambasted then Gov. Erhlich's PSC for approving a 72% BGE rate increase. With maneuvering by the Legislature for a 15% increase, the bottom line of the former/ current PSC has little difference in what Marylanders have to pay in higher electric bills.

And,how much experience in the energy/ energy markets does the new PSC have? Steve Larsen, the Chair appointed by O'Malley has a strong record as a consumer advocate. His knowledge of and views towards the complexities of the energy industry are guarded -- and that may have an impact on just how much in depth the PSC is prepared to go in the proper balance between a regulated and deregulated environment for energy production/ distribution .

Which is better: regulation or deregulation? Consumers want the lower prices or deregulated energy policy when supply, through the grid system is strong. When tight, the lower price can be achieved through a wise PSC oversight. But, the bottom line remains: neither all regulation from a government agency "on high" nor a the idea free market economy can be the ideal solution for power availability all at reasonable rates.

The politicians have proven that they cannot magically deliver lower prices. Example: the General Assembly sat on this issue for too long -- through most of the Glendenning Administration -- as a matter of political "convenience" whereby Annapolis posed as the consumers' "best friend". This inaction forced a response by then-Gov. Erhlich's PSC which was attacked as anti-consumer. There was an attempt at some balanced decision -- but, now the rate meters at our homes have "come home to roost": too high on the nest!

This means that analysis must come first: the Cato Institute's forthcoming report "The Maryland Electricity Market: a Primer" is expected to provide more substance and less politics. When he returns from the New Hampshire circuit of an election a year and a half away, Gov. O'Malley and his still-learning PSC Chair Steve Larsen had better become more analytical and less political. Mike Miller and Michael Busch -- as the Legislature's control force will look for an easy out , to be able to tell Marylanders: "look how much we love you".

What is the "big picture" that looms overhead? If the world of fiction --- including huge stock and salary benefits for too many top tiers of corporate American -- continues , one solution might be considered for both the electricity rate levels and the huge mounting State government deficit which is being postponed by Maryland's political power structure. The public should demand a high-level, objective analysis --- and , soon.

Suggestion for how to do the objective analyis: the appointment of a bipartisan commission with fiscal/ nonpolitical analysts to do the work on these two urgent policy issues:

1) electricity rates / supply and demand --- with a balanced approach that works in the long-term to recognize the challenges facing the suppliers and the consumers.
2) Deficit control by those who know both the worlds of the private sector / business and the government.

Suggestions for REAL leadership? Here's a recommendation , Governor O'Malley and your "spendrift" comptroller Peter Franchot:

Take the national model of honest bipartisanship: the Baker (James Baker/ former Secy. of State ) / Hamilton (Lee Hamilton , former Congressman and now Chair of the Woodrow Wilson Policy Center) Commission .

Make Maryland work through these two series problems of electric rate costs and an escalating state government debt. How? This Governor needs to stop[ campaigning long enough to appoint a Commission co-chaired by Aris Melissarotis, former Secy. of Economic Development, and Cas Taylor, former Speaker of the Md. House of Delegates. Action and action NOW is needed; not the delay of waiting for a "special session" where a band-aid will be applied in the same way as 2 years ago when the trial lawyer Legislature papered over the climate of lawsuit excess that could drive doctors out of practice in Maryland.

Labels: Constellation, Energy, O'Malley, Prices

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