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US: Ehrlich Vetoes BGE Rate Deferral Bill

He objects to lack of choice, interest included in measure; override expected

by Andrew A. GreenThe Baltimore Sun
June 22nd, 2006

Gov. Robert L. Ehrlich Jr. announced today that he has vetoed the BGE rate deferral plan the legislature passed last week.

He said in his message to top lawmakers that he could not support the measure because it gives consumers no choice in whether to participate in the plan, which caps this year's rate increase at 15 percent but requires them to pay a monthly fee for 10 years.

He also objected to the $109 million in interest BGE would be entitled to over that time, the firing of the Public Service Commission and the People's Counsel and the amount of rate relief the bill requires of BGE's parent company, Constellation Energy.

"We can work together to craft a more balanced, pro-consumer solution," Ehrlich said in the veto message. "I request the members [of the legislature] return to work immediately on an alternative solution that will prove more consumer friendly."

The General Assembly now stands in recess, and top lawmakers said they will return to Annapolis tomorrow to override the veto.

BGE's rates are set to rise 72 percent on July 1 with the expiration of rate caps instituted as part of Maryland's 1999 deregulation of the electric industry.

During last week's special session, lawmakers passed a plan that would limit the rate increase to 15 percent for the next 11 months. Customers would be assessed a monthly fee -- estimated to average $2.19 after give-backs by the company -- for 10 years to make up the difference.

After the 11 months, customers could choose to begin paying market rates for electricity or to participate in another deferral plan, which would probably add to the monthly fee.

The plan passed both chambers with a veto-proof majority, and many of Ehrlich's fellow Republicans voted for it.

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