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Political Animal

The Long, Hot Summer

By Brian Morton | Posted 3/22/2006

It’s times like this where America’s few up-front and unapologetic socialists can sit back, gloat and say, “We told you so.” Right now in Annapolis, politicians from both parties are running around with their hair on fire trying to figure out a way to save their collective political hides from the sword of Damocles poised to drop in the height of summer. Once the air conditioners come on full blast, in the middle of one of our legendarily muggy Julys, that’s when the switch will click over and state regulation of electricity will end, and then, boy oh boy—it’s Hammer Time.

Nonsocialist state Sen. George Della of Baltimore last week told The Gazette, “It was a bipartisan meltdown.” Back in 1999, the 46th District Democrat opposed deregulation. “It’s real easy to sit back and say that ‘I told you so,’ but look at what people are going through,” he told The Gazette. “I said nine months ago that this would be the No. 1 issue. Now, lo and behold, this is the No. 1 issue.”

How funny it is that at the start of this legislative session all the talk was about gay marriage, stem-cell research, and the state’s budget surplus—and now all lawmakers can think about is who their constituents will blame when their electric bills spike 72 percent higher than they were last summer. Even funnier is that there is little cover for anyone on either side—it’s hard to feel sorry for anyone who argued in favor of deregulation back in 1999. The one person who can take a small amount of comfort in the fact that he had public reservations about deregulation is the man who left Annapolis with somewhat less than a reservoir of goodwill in his pocket—former governor Parris Glendening.

Let’s look back at those glory days of yesteryear, shall we? Back then, regular gasoline prices were hovering around the dollar-a-gallon mark, the nation was flush with a budget surplus, and the possibility hung fat in the air that there were more to come. Energy companies were throwing money around like Halloween candy, with promises of even cheaper energy in the future as a result of the supposed competition that would arise from deregulation of their markets. The fact that you can’t very well ship energy from Massachusetts to, say, Georgia, never entered into anyone’s minds. Back then Enron paid its Annapolis lobbyists, a company by the name of Alexander and Cleaver, more than $177,000 to push for deregulation—money that of course made its way into the 2000 re-election campaigns of lawmakers both Republican and Democrat.

In the meantime, once the deregulation bill landed on Glendening’s desk, the governor still wasn’t all that enamored of the idea, but the legislature made it clear that if he vetoed it, they’d hand him a rebuke in the form of an override the following session. The Gazette published an excerpt from Glendening’s letter to the leadership showing his reservations: “I am hopeful, but not yet convinced, that the cap . . . will assist consumers in purchasing market rate electricity.”

Much as it pains us here at Animal Control to say this, but Glendening had a point. During the lead-up to the national energy deregulation spree at the end of the last century, power companies had fanned out all over America touting the alleged benefits of the cheap power to come for everyone who deregulated the nation’s power companies. A Los Angeles Times story from February 2005 detailing how Enron juked the markets of Western states that approved deregulation noted, “Suggestions that Enron’s plans to exploit the energy marketplace as much as three years before the 2000-01 energy crisis jarred some officials, who recalled how Enron executives were traveling the country about the same time making a case to deregulate the marketplace.”

The L.A. Times story went on to point out how some Enron shenanigans were being implemented as far back as 1997, and how the Federal Energy Regulatory Commission argued that Enron should give back $1.7 billion dollars in profits illegally gained from manipulation of the markets.

This is not to compare BGE or its parent company, Constellation Energy, to Enron—to date, no one has shown any illegal or improper behavior on the part of either company. But it is clear that what was sold in 1999 as a way to provide cheaper energy in the end only wound up enriching the power companies, quite likely at the expense of Maryland’s energy customers. Look at it this way: Whenever someone tells you deregulation will “create competition,” look back after five or 10 years, and what you’ll find is more and more mergers leading to fewer and fewer entities. And those entities then argue that the way to spur even lower prices and more competition is to allow them to merge and form even bigger companies.

Today, Enron’s lobbyist from 1999, Alexander and Cleaver, is the lobbyist for Florida Power and Light, the company that is pushing for an $11 billion merger with Constellation Energy. What have we learned here?

So it’s almost enjoyable to watch lawmakers squirm over a quandary of their own making, knowing that if they don’t do something, it will be a long, hot summer for more than those of us paying for the air conditioning.

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The Fix (8/4/2010)

Police State (7/7/2010)

Funny Business (6/9/2010)

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