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July 17, 2006

A Sad Case of ''Told You So''

Richard B. Weldon Jr.

Looking back on the 2006 General Assembly's Special Session, the Democratic leadership of the House and Senate were determined to shift responsibility for high electric bills from their flawed deregulation scheme to Gov. Bob Ehrlich and the Public Service Commission (PSC), or at least his appointees to that commission.

Del. Curt Anderson (D., Baltimore) was the self-appointed floor leader, rounding up the signatures on a special session petition on behalf of Speaker Mike Busch (D., Anne Arundel). Almost all of the Democrats got their name on that petition, and those who didn't were quick with a quote for the news media.

Right out of the liberal playbook, Democrats enlisted their well-oiled propaganda machine; energizing the labor unions, environmentalists, and left-over hippies to paint placards and protest at Baltimore Gas & Electric corporate headquarters and the Governor's Mansion.

Blaming Governor Ehrlich and the PSC is dishonest; but that never stopped a protest. In fact, a little obfuscation goes a long way in Annapolis. Perpetual spinmeisters like Del. Peter Franchot (D., Montgomery), now a candidate for state comptroller, whimpered that high electric rates arose from the close relationship between Governor Ehrlich and that boogeyman of the left: Big Business.

Truth be told, government and business need a symbiotic, mutually beneficial relationship. Citizen's interests are best served when the government implements policies that encourage private investment in commercial endeavors. This embrace of capitalism creates jobs, spurs local economies, and has a multiplier affect, spreading the wealth it creates.

Back to the moonbat protests. Signs read "High Prices=Gov. Ehrlich", and "Yo Ho, the PSC Has Got To Go". Democrat gubernatorial candidate and Baltimore Mayor Martin O'Malley jumped into his limo and his police officer/chauffer drove him to Annapolis. He couldn't miss a media opportunity like this. Along for the ride was Del. Anthony Brown (D., PG), now the lieutenant governor candidate O'Malley's ticket.

The logic of the Democrat blame game is so transparent that only the casual observer or Kool Aid drinker will buy it. If the PSC was solely responsible for high electric prices, or if Bob Ehrlich's attitude towards big business was to blame for high BG&E consumer electric bills, what about the spikes in prices that were occurring throughout the Glendening years? While the Democrat-led legislature hunkered down under their phony six-year rate cap, the market forces affecting electric prices resulted in continual increases.

Even the Glendening appointees on the PSC sat on their haunches, happy to let the warm glow of phony rate caps lull them into inaction. So, it seems more than a little disingenuous now for members of the majority to forget their history and try to blame someone else for the trauma they have wrought.

Governor Ehrlich issued a call for the legislature to return to Annapolis to address the rate situation. He threw out several ideas, including a return to the bill he and Speaker Busch had negotiated on Sine Die back in April.

Senate President Mike Miller (D., PG/Calvert) was silent, but he was working behind the scenes to limit the governor's ability to influence the legislature. Senator Miller is a master strategist, a political Machiavelli who understands the power of perception (versus truth) in shaping public opinion.

So, the majority rammed through a bill to extend another rate cap, remove Governor Ehrlich's PSC appointees, and included language subjecting the planned merger of BG&E/Constellation Energy with Florida Power & Light to additional oversight and scrutiny.

Governor Ehrlich vetoed the bill. In his initial veto, he included an ominous prediction. The governor expressed a concern that the bond rating agencies on Wall Street might perceive the legislature's overreaction as destabilizing the utility, and could have serious repercussions on the financial strength of those same electric companies.

With Mayor O'Malley playing cheerleader, and with the forces of organized labor acting as the Hallelujah Chorus, the General Assembly came back to Annapolis to override the governor's veto.

Override in place, Democrats toasted their victory, sending the PSC into court in an attempt to fight their legislative termination. Democrats weren't worried, though. They had a written opinion from their Enabler-In-Chief (and O'Malley's father-in-law), Attorney General Joe Curran. He had already concluded that the leadership could pretty well do whatever they wanted in this regard.

The truth always triumphs, even when politics struggles to manipulate reality. Today, better than a month after the override, the future of the General Assembly's action can be viewed for what it has and hasn't accomplished.

It hasn't:

- Solved the underlying causes of the rate increases; and kit hasn't

- Reduced commercial electric rates, like the ones that closed Eastalco; and it hasn't

- Protected consumers from eventual high rates (in fact, it's done the opposite); and it hasn't

- Established a repeatable, standard rate stabilization plan for other utilities; and it hasn't

- Terminated the PSC, they're currently protected by a court order pending a review of the constitutionality of the legislature's action by the judicial branch (in spite of Joe Curran's assurance).

On the other hand, it has:

- Lowered residential electrics rates below the projected rate increases through another cap that only lasts for 11 months; and it has

- Resulted in a Maryland Court of Appeals review of the constitutionality of the PSC termination; and it has

- Given a new PSC powers it denied the previous Commission, and if granted, might have made this whole thing moot; and it has

- Further poisoned the political atmosphere in Annapolis; and it has

- Made Gov. Bob Ehrlich look like a mind-reader.

It is this last point that demonstrates the true seriousness of this situation. This past week, two of the Wall Street firms, which rate the financial stability and credit-worthiness of corporations, revised their credit rating of several of the Maryland's electric utility companies, including BG&E.

This downgrade has several serious affects, none as serious as the increase in the cost to borrow money. Because of the actions of the Maryland General Assembly, more specifically the Democrats in both the House and Senate (along with a few recalcitrant Republicans), when these utilities need to upgrade facilities, purchase equipment, or repair major breakdowns, this downgrade will increase their cost to borrow money.

If the utility has to borrow money to provide continued electric service, who do you think will have to pay that increased cost to borrow money? You, the residential ratepayer, will bear the increased cost.

You can thank Martin O'Malley, Mike Busch, Mike Miller, and the Democrat majority in the General Assembly for burying another hidden cost in their battle to gain political advantage over Bob Ehrlich.

Unfortunately for them, Governor Ehrlich told us this was going to happen back in April. He reminded us again after the Special Session when he issued his veto. Maybe, just maybe, if policy had mattered more than politics, we wouldn't be in this mess.

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