Another Maryland Legislative Stupidity

Early yesterday morning, the Maryland legislature approved a plan that would delay a proposed electricity rate hike, a 72 percent hike, for 11 months. The plan has not met with approval from Governor Bob Ehrlich (R-MD), who is not considering his options. Complicating matters for Ehrlich are two things. First, the bill was passed with a veto proof majority. Second, Ehrlich and the entire legislature are up for re-election in November.

Earlier this year, Baltimore Gas and Electic announced after the previous limits on rate hikes had expired, that their customers were going to face electricity rate increases of up to 72 percent. Of course, it is easy to assume that it is merely the greedy public utilities looking to make more moeny--which is exactly what Democratic legislative leaders and the Governor said. But that is not what is really happening. For years, the electric utilities in Maryland, and in most states, have been limited by regulation on how much they can increase rates, despite the massive increase in power consumption across the country. While the power companies must provide more and more power, their costs going up while they do so, they are not making enough money to cover those costs. This is rather simple economics. By increasing the rates they charge customers, BGE was hoping to cover their costs. I do not blame them for this, despite the fact that I was not happy about the increase. My response would have been to drastically cut my energy consumption, (which I could have done).

But the Democratically controlled legislature, sensing an opportunity to score political points with their constituents jumped into the fray. Governor Ehrlich is also looking for a political score, and called the legislature into session to address the problem. The result is a bill so crassly political in nature that Governor Ehrlich should veto it to make a point. The bill would limit the immediate increase to 15 percent but would allow, in 11 months, the full increase to take effect. So, by delaying for about one year, the Legislature can be heroes in this election, but the memory of their action will, hopefully, be a distant memory when teh 2010 election rolls around. Adding to that, the May 2007 sunset will push the rate hike until after the legislative session has closed next year.

Lost in the shuffle of the political posturing is the fact that the 11 month delay may actually result in a higher rate increase next year. BGE, and indeed utilities, routine lose money because of limits on what they can charge. The result is that most Americans have no idea the true cost of the energy they consume. Is a 72 percent rate hike huge? Yes, but so was the 70% property tax increases many people in Maryland experienced last year, but you don't see the legislature limiting those tax increases. This bill does not help the average consumer. It does not lower energy costs, it does not encourage energy conservation, it does not help the businesses who provide energy to Marylanders. All this bill does is help get a pathetic legislature re-elected--they hope.

The crassness of this ploy should not go unnoticed and the Governor should call the legislature on their "plan." The Governor should veto the bill, make a strong statement that this is not what he wanted for Marylanders and make the Legislature vote again on such a blatant political move. Then come September (the Maryland Primary) and November, voters should kick this legislature to the curb.