May 4, 2010

Analysis: No easy campaign slogans on electricity

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By Andy Rosen
Andy@MarylandReporter.com

The repercussions of the 2006 campaign’s heavy focus on electricity policy are still being felt as Maryland begins the long march toward November’s elections.

While energy was one of the defining issues of the gloves-off battle between Baltimore Mayor Martin O’Malley and then-Gov. Bob Ehrlich, it remains to be seen if it will become a big talking point this year. But the debate over how best to hold down residential energy costs in Maryland has raged in Annapolis from gate to gate.

Still, the real question of whether rates would be lower under a fully-regulated system — or whether more competition would reduce prices – has never really been answered. Nor have questions over which system would be more likely to help Maryland develop more capacity to meet growing future demand.

Thursday’s lead story on MarylandReporter.com explained the maneuvering that went on this year, as the House passed open market reforms and the Senate, which is more inclined toward tighter state control over prices, balked.

Key votes in a Senate committee didn’t materialize, due in part to staunch opposition from re-regulation supporters who haven’t changed their tune. Sen. E.J. Pipkin is one of the loudest.

The Upper Shore Republican says he hasn’t decided what office he’ll seek in November. In 2008, he ran and lost to Andy Harris in a primary for the congressional seat now held by Democrat Frank Kratovil. He’s also unsuccessfully challenged Democratic U.S. Sen. Barbara Mikulski before, and he might try to stay in the state Senate.

But whatever Pipkin decides, he’s likely to make energy policy a topic in his campaign.

“This is something that I’ve worked on and seen for eight years,” Pipkin said “I still think re-regulation is the way to reduce rates for Maryland customers.”

House Economic Matters Committee Chairman Dereck Davis, D-Prince George’s, said he doesn’t see the re-regulation debate being a big deal for the gubernatorial election, but he expects it will play out in other state races. Davis was a lead backer of the open market reforms that Pipkin moved successfully to kill this year.

“A politician could get a lot of milage out of this in the upcoming election or in future elections,” Davis said in an interview this week.

O’Malley scored points in the election of 2006 by criticizing Ehrlich’s handling of a 72 percent increase in most residential rates at Baltimore Gas & Electric. Though BGE and its parent company, Constellation Energy Group, were the frequent targets of O’Malley’s ire during this term, he was unable to stop the hike.

He did come up with a $2 billion settlement between the state and Constellation in 2008, which provided some rate reductions. A further condition on a nuclear deal between Constellation Energy and Electricite de France gave BGE customers $100 off their bill.

Ehrlich has already hit O’Malley on energy as they kick off a rematch, citing a “failure” to stop the rate increases O’Malley criticized in 2006. Ehrlich, in his pre-candidate phase, had previously hit O’Malley for the methods he used to extract the bill savings.

“He broke his pledge to stop the 72 percent increase in energy rates that hurt one million Marylanders,” Ehrlich complained on Earth Day.

Tom Russell, O’Malley’s campaign manager, said in an interview that the governor’s prepared to defend himself on energy rates. He cited this week’s news that energy prices are going down (though as a Baltimore Sun editorial points out, neither the spike nor the increase was in either governor’s control).

O’Malley will continue to present himself as more consumer friendly than Ehrlich, Russell said.

“I think it’s because O’Malley’s been fighting for ratepayers and not rolling over for big utilities the way the Ehrlich administration did,” he said.

In light of the Great Recession and high unemployment, arguments on electricity rates may be old news to voters with bigger issues to worry about.