3/28/08 Constellation Deal

So, what is up with this deal between O’Malley and Constellation?   Where are the voices of dissent?   Where are the voices in our state legislature, in print, on TV and in radio who are raising questions about this so-called settlement?

Martin O’Malley ran on a campaign to address consumers being shortchanged, over-charged and ripped off by Constellation and their home state company BGE as a result of the 1999 deregulation of the industry.  A move pushed by Sen. Pres Mike Miller and one of the forgotten forces behind all that lobbying in Annapolis in 1999 – ENRON.

The state government and Constellation say this will allow us to deal with a looming energy crisis in the next few years that will lead to brownouts across the state.   We don’t generate enough electricity for our growth.   But how does this “settlement” address that issue?

 OK, so now we are getting some credit and rebates and the state won’t have to pay the bill of deactivating Calvert Cliffs nuclear power plants.  We all get back $175 if we are lucky and they get to profit millions or even billions.  We are still saddled with at least a 72% increase in our rates.  Governor and state leaders, tell that to our bank accounts every month!

Because of the settlement, there will be no more investigations into stranded costs paid to Constellation to compensate them for losses that never occurred when they took over BGE plants.    What about the investigation into the corporate relationship between BGE and Constellation?   What about the accusation that Constellation sells Maryland energy sources outside the state, then sells them back to us, to BGE for huge profits?  No further investigations into the wholesale power auctions and our exponentially rising utility bills! Investigations in 2005 and 2006 clearly showed something amiss.   It clearly appeared we were being gouged and huge profits were being made.  We will never know the answer to what happened to us and what Constellation really did.

No subpoena power for the Public Service Commission!   How will they get to the bottom of anything as they look at re-regulation of the industry and plan for the energy future of our state?   Steve Larsen, Chairman of the PSC, on my show, said he wanted the answers to this and more.  Now his hands are tied.

Constellation stock is now on the rise.   They can have outside investors without state regulatory approval. 

What about the future?   Hydropower will have its end.  Our dams can’t handle the load and the silt is building up.   Solar, wind and nuclear will take years to make a dent in our total energy supply.   Does this give Constellation the power and right to continue to mine coal, spew its death into the air, and make West Virginia look like a moonscape after the tops of our most ancient mountains are lopped off?

We need better answers to what de-regulation did and what was going on between Constellation and BGE.   We need a better plan for our energy future than we are getting.

State legislators need to raise their voices and raise questions.    Our local media needs to investigate and keep this discussion alive.  We all need to be involved at whatever level we can to keep the pressure on.

 Dealing with the power of Constellation Energy and the rates we pay was a central theme of Martin O’Malley’s run for Governor.   This shows all too well the power that corporate giants have in our state political process.   I know Governor O’Malley felt pushed against a wall.  We have a very precarious energy future in the next few years.  This settlement, however, was not the answer.  It was not even close. 


19 Responses

  1. This is why we need you back on the air! I have not heard anyone question this deal. I was outraged when this plan was mentioned on the news. I am e-mailing my representatives in the State House about this as it is not complete without their approval.
    I miss you.

  2. Here’s what I sent to Martin O’Malley, my 43rd legislative district “representatives” and others. After that, please find my 2 letters to the Sun from yesterday and today – big surprise that I haven’t been called for publication. If I sound just the teensiest bit angry, it’s because I am – as we all should be – and we should all be out in the streets over this sellout.

    To O’Malley and the gang:

    I rarely contact you because it’s a waste of time and I’m a very busy community organizer. But I have to ask – do you really believe this garbage you’re sending out? You and the General Assembly have SOLD US OUT yet again – we’re all shocked, shocked, I tell you! No amount of spin will ever change that gleaming little nugget of truth.

    I wonder that savvy politicos like yourself never seem to know when people stop believing your lies – and it happened a long time ago. It would be better if you’d just give it up and send out an email saying

    “Constellation execs and I (good friends and golfing buddies all) have colluded to make sure that the scheme of deregulation continues here in liberal, blue-state Maryland while we secure our own jobs and take Constellation’s campaign cash – that’s the real win-win!! (was it $70 or 80K? I just can’t keep it straight between you and Ehrlich). For the fashion-conscious (let this warm you up if you’re freezing in your 55 degree house), you should feel so damn good that your hard-earned money has gone directly to Mayo Shattuck and his beautiful wife, Molly, so she could bid $25,000 on a dress at a charity auction. After all, charity begins at Constellation! That is, if you can shake the promised assistance loose. Oops, that’s right, you don’t qualify. Too bad, but you didn’t need half your monthly income anyway! This is what one-party rule gets you, suckers, but hey, it’s better that the alternative. So, while we pick your already empty pockets and collude with that bloated behemoth, Constellation/BGE, just remember, it could be the Republicans doing it.”

    Whew, even I feel better knowing I’m getting screwed by Democrats!

    Maria Allwine
    Baltimore, MD

    I will never – and I mean never – vote for you or any candidate you support – not that I did before – I got past that a long time ago.

    PS – Thanks, General Assembly – you’re the best!

    Two letters to the Sun:

    When Mayo Shattuck says “All parties gain meaningfully in this carefully crafted settlement, and the overarching value is a return to regulatory stability and normalcy,” he lies. The residential ratepayers get nothing but the inevitability of increasing rates under the continuing scam of deregulation. This is the very meaning of deregulation – skyrocketing rates which do not reflect the actual cost of producing and delivering electricity.

    Constellation executives and lawmakers have colluded once again to cover themselves and leave exposed to the whims of the deregulated market those who need protection most, the residential ratepayers who have nowhere else to turn for their electricity.

    We are expendable in this political game and we have been offered up as the sacrificial lamb to unbridled corporate profits and power.


    Instead of reregulation (Virginia), indefinitive extension of rate caps (Pennsylvania) or huge rate concessions ($1B in Illinois), BGE’s residential ratepayers get a measly one-time payment of $170, no assurance that the price per killowat hour will remain stable and an ‘improved regulatory environment’ (no reregulation) for BGE/Constellation.

    What a great deal for BGE and what a shafting for us. What I want to know is – who padded whose pockets and why does Constellation have such an iron grip over our governor and state legislature?

    Maria Allwine
    MD Coalition to Stop the BGE Rate Hikes

  3. Oh Marc, we miss you. This is so complicated for some of us. And they want it to be.

  4. Please post a link to the proposed settlement agreement.

  5. this is why i feel that you marc were booted from YPR. you were the ONLY one out there to constantly question BGE et all and i know in the pit of my stomach that the corporate big wigs put the screws to YPR management to try and “silence” you on this. keep up the good work you are doing here, we need voices like you and us, but i am really disgusted that there is no public display of anger over this. if we were in europe, central america, hell, even an “islamic” country, there would be THOUSANDS of people protesting in the streets ready to burn down BGE headquarters. i only wish the public here we as motivated !!

  6. I agree with Aaron; we are too uninformed and complacent ; whether it is BGE or the war… we are sheep…. And there is an absence of “outrage” …We will be doormats as long as we allow ourselves to be doormats !!!

    And I also agree with the other posters… there is so little indepth coverage of this issue our there…..

    We need more coverage of the facts behind these dealings…. We also need a what we can do….

    I think protesting in the street is not something most people are comfortable with in this country…. and I question its effectiveness….

    We need to know who we can write to and we need to know what concrete action we can take to send constellation and O’Malley a message

    I remember a while ago hearing talk of other energy companies that we may be out there . I think maybe in western Maryland …. I think this is all the more reason to start embracing alternative energy sources…I’ll be moving in a about a year and will be putting solar panels on my house….. I know the Baltimore Green Festival is coming up … I believe April 19th… I’m hoping to get some ideas there as well

    What are some other actionsa we can take ?

  7. Thanks Marc! Great summary of the moment where Martin blinked, and the state’s citizen’s lost big-time. We must get Steve Larsen and the PSC subpeona power or this will become a Democratic authorized, continuous screwing of the public (the state equivalent to the national Dems caving on the Iraq war and the Patriot Act). Like Aaron, I think this is the issue that Brandon really had in mind when he sent that infamous email. No Marc=No Money!

    Lets all get out for the CAB meeting at the BMA this tuesday April 1st and remind them why this fight is important!! We are not going away; heck, with these ridiculous utility bills, we can’t afford to go anywhere!

  8. Neither this governor or the last have a clue about how to get us adequate electrical energy in the future. The last governor sat on his hands for three years knowing the rate caps were going to expire and ignorant that Constellation had better markets for Calvert Cliffs power elsewhere. Worst yet, he relied on former delegate Ken Schisler whose only knowledge of energy policy was what he had learned as a delegate. This governor wants to spend 93 million a year of our money for unknown “conservation” programs that may have an result in 15 to 20 years. Why not take that money and begin a fund to start a publicy owned, Maryland located nuclear power plant.?Why not sell bonds to Marylanders to raise money for the plant ( yes it will require billions) with no payoff until the plant is up and running? Nuclear power has ZERO carbon emmissions and cost .05 cents a kiowatt hour ( including paying back construction debt). Clean maryland power employing marylanders for maryland. What a concept!

  9. Marc, why do you feel the need to defend Martin O’Malley? The guy had no problem passing along the largest tax hike to Maryland’s working families at a time they could ill afford it. He is a politician with eyes that are bigger than a kid in a candy store.

    He said whatever it took to get elected and then preceded to crap on the people who helped him. How can the guy turn to the steel workers who elected him and say I fought for you?

    Quit making excuses for him. He’s in bed with BGE the same way he criticized Ehrlich of being in bed. The saddest part is that Ehrlich got a better deal than O’Malley did for consumers.

    I wasn’t the previous guy’s biggest fan, but O’Malley has no shame be it raising taxes or caving into big corporate interests. The worst part is the guy mascaraed around as something he wasn’t. All politicians are two-faced, but O’Malley takes it to a whole new level.

    This deal just sucks. No monthly help. No difference for those of us paying bigger bills to those will smaller bills. No chance at re-regulation. And it left a good $700 million in stranded costs on the table. No wonder the CEG stock went through the roof. I almost bet this damn Governor bought CEG stock the day before with the way he’s doing… I mean seriously, he makes Elliot Spitzer look like an angel.

  10. What really perplexes me is that almost every elected official in MD seems to be totally scared totally stiff of doing anything other than grandstanding on this issue. There’s a lot of finger pointing at one politician or another and one party or another, but the lack of meaningful action cuts across all political and jurisdictional lines.

    This is particularly astounding given that there are two very simple solutions to this problem, neither of which could be any worse for ratepayers than the current situation – the first being to regulate BGE back to the stone age, the second being the creation of real energy choice in MD.

  11. I agree this deal stinks to high heaven. O’Malley and team have lost the battle — and maybe the war — by succumbing to a fight in the weeds. The broader issue — i.e. the restructuring of BGE so that profits and control are sheltered in Constellation substantially outside of regulation — is what needs re-examining and arguably a dose of the Invisible Hand.

    Marc, on YPR, your role was commentator and host, but perhaps the Center for Emerging Media can shift duties a bit. A little more substance here might put some teeth in the cry to battle.

  12. I was recently asked this question: When taking over a brand new team, which is most important popularity or progress? I smiled.

    The term popularity during the 15th century started out as a word that meant least, low, vulgar, and/or of the common people. It took on a new meaning in the late eighteenth century by which time it began to gain a positive connotation. Another example of man manipulating change.

    The difference is that progress has always meant what it means today. One may have been popular during the election – not so sure that is still the case. I am sure that this move does not appear to be of progress for the people.

    Just my thoughts.

  13. I’ll put this out to Maria or anyone one else e that has any ideas…

    What can we do as citizens to 1.) protest this in a way that will get their attention… .and 2.) make changes in where and how we obtain our energy ???

    I’m thinking of the group in Baltimore who has pooled together and formed a bio-diesel cooperative(before we knew that first generation bio-diesels were actually worse for the environment and people)

    These were a group of folks to decided they were going to pull together and find alternative energy sources…. Is there anything in the works like that… an alternative to Constellation ???

  14. By all means, lets meet up tomorrow evening at the Baltimore Museum of Art, Hess Board Room, for the 6 p.m. CAB meeting.

    I hope the Steering Committee will hand out its report and/or post it on their blog site.

  15. Sprawl lover and James have it right – Did you ever happen to think there is a part 2 to this deal not published – in return for this settlement which is really small money, Constellation will site it’s next nuclear plant in Maryland and agree to sell cheap power through BGE. That’s what I bet is going to happen – though my expectations of OMalley are low, he only thinks about next weeks opinion poll and promises everything and delivers nothing

    And amen to those criticizing Mark about defending O Malley – just look at sales tax and income tax effect on your take home pay!

  16. The next WYPR Community Advisory Board meeting is scheduled for Tuesday, April 1 2008 @ 6pm in the Hess Board Room at the Baltimore Museum of Art. Community Advisory Board meetings are open to the public and you are warmly invited to attend.

    The Baltimore Musuem of Art
    10 Art Museum Drive
    Baltimore, MD 21218

    Please call Victoria Liberman at (443) 573-1710 if you have any questions.

  17. To all the thoughtful posters here – I would like to share specifics of the history of hat has happened and why, what it means for the residential ratepayers in the long-term and what we can do about it – but it’s too much info to post here. We would need to meet sometime. In the short-term, I am sick at home trying to shake pneumonia so I will not be around this week. But I am hoping to hear a report about the CAB meeting tonight – and move forward on meeting with them.

    In the meantime, on BGE, at the very least call, email and write to your legislators to let them know (1) you know they’re ripping us off and (2) you’re angry about it and will not vote for them in future. That’s for starters!!

  18. One more thing – everyone needs INFORMATION so we can fight this. I have that information, as do others, but as I said previously it’s too much to post here. I would love to meet some weekend day or weekend evening for about an hour just to give you a lot of info so you are armed for battle.

  19. Maria,

    I hope you feel better !

    I’ll get in touch with you about this soon

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