posted on Wednesday, September 20, 2006 10:30 AM by Gunnar Birgisson

Latest Twist: Maryland Court Reinstates Commissioners

The bitter fight over the impact of electricity restructuring in Maryland saw another twist last week when Maryland’s highest court, the Court of Appeals, voided parts of a state law that would have fired all members of the state’s Public Service Commission and replaced them with new members chosen by the legislature.  The court concluded that the law violated the state’s constitution by infringing on the governor’s authority to appoint members of the PSC, which is function reserved to the executive branch of government.

The dispute grew out of anger from the public and politicians at a 72% rate hike for Baltimore Gas & Electric that was to take effect following years during which BG&E's rates had been frozen pursuant to the state’s 1999 electricity deregulation legislation.  That legislation lowered BG&E’s retail rates to a level 6.5 % below the rates that had been set for the utility back in 1993.  Having grown accustomed to service at below-market rates, consumers reacted angrily to the rate increase that was to follow when the rate freeze ended this year.  The Court of Appeals ruling, however, did not address other parts of the state law, which included phasing-in increases in BG&E's rates until they approximate market prices, and carrying forward BG&E's losses for recovery in the future.