Here's what Mike predicted in a Jan. 17, 2002, story I wrote:

In the first major examination of Maryland's effort to restructure the electricity market, a report released yesterday by the People's Counsel said that deregulation has failed to produce competition and new services for residential customers since it began 18 months ago.

The report recommended that until there are clear consumer benefits, the Maryland General Assembly should consider suspending electricity choice for the state's 1.8 million residential customers who could face higher prices and no alternative energy suppliers.Legislators should also consider forcing state utilities to continue supplying power to residential customers who have not switched to another supplier once price caps begin expiring in two years, the report said.

"We don't really see benefits in a state like Maryland, which had average to below-average prices to start with," said People's Counsel Michael J. Travieso, the state advocate for residential customers in utility matters.

"There's so much instability in the sector. There's volatility in the wholesale price market. There are changing federal rules, Enron Corp.'s collapse and the happenings in California. All sorts of things that didn't exist in 1999 when the deregulation statute was adopted.

"There are real concerns about what will happen to residential customers," Travieso added. "In light of everything that has happened, there is evidence that bad things will happen to residential customers."

In the 18 months since deregulation began, 2.6 percent of the state's residential customers have switched to an alternative energy supplier and only one company is soliciting new residential customers, according to the report.

In the Baltimore Gas and Electric Co.'s service territory, the report said that only 14 residential customers had switched to another supplier.

BGE officials yesterday disagreed with the recommendations.

"We clearly think the need for the legislature to revisit electric choice is unnecessary," said Charles B. Welsh, a BGE spokesman.

"We're fairly confident that, by 2006, there will be an active and competitive market in Maryland. We don't share the [the People's Counsel's] concern that there will be higher prices and scarce supply. We think it's grossly premature for them to come to that conclusion," Welsh said.

The Maryland Public Service Commission, which oversees and regulates utility matters in the state, declined to comment because officials had not received a copy of the People's Counsel's report.

With the start of deregulation in the summer of 2000, Maryland residential customers were given the power to switch to an alternative energy supplier.

But to give the market time to develop, the deregulation law also gave residential customers some protection in the form of price freezes, rate caps and low-income assistance.

State law also required utilities to provide electric service - known as standard offer service - to customers who do not switch to another supplier until July 1, 2003. At that time, state law requires a competitive bid for SOS customers.

But with little competition available and volatility in the market, the Travieso report suggests that legislators should require state utilities to continue serving as the provider of last resort once price caps are lifted. Not doing so would leave residents vulnerable to whims of the market, the report says.

Those rate caps expire in July 2006 for residential customers in the Baltimore region and in July 2004 for other parts of the state.

"While residential consumers are benefiting from mandated price reductions and price caps, they have seen no real savings from competitive retail electric markets and have no real opportunity to switch between electricity suppliers," the report says.

Maryland's Electric Choice Program has not produced any new products, bundled services, distributed generation options, special billing or payment arrangements for customers, the report by the People's Counsel stated.

Add to that, Travieso said, risks within the energy sector that have cropped up over the past year, including power price manipulation in some markets, the financial instability of many energy companies and continuing changes to federal energy regulations.

Here's the Waldron-Dresser story:

In their successful effort to open Maryland's electricity market to competition, utilities and heavy industrial users of energy spent $2.1 million on General Assembly lobbying expenses during the past six months, according to reports filed by the companies yesterday.

The corporations' lobbying budget appeared to set a record for a single bill in the State House and dwarfed that of consumer and environmental groups, which spent less than $25,000 trying to stop or soften the legislation.Leading the way was Baltimore Gas and Electric Co., which spent well over $1 million on lobbyists and an expensive campaign to generate public support for electric utility deregulation, according to the company's reports filed with the State Ethics Commission. Potomac Electric Power Co., which supplies power to the Washington suburbs, spent more than $400,000.

Meanwhile, lobbyist Bruce C. Bereano continued to earn a good living despite having to begin a five-month federal sentence for mail fraud in a Baltimore halfway house early in the 90-day legislative session.

Bereano, who was convicted in 1994, received compensation and expenses of more than $305,000 from 35 clients for the six-month period ending April 30, a slight decrease from his earnings a year ago, according to his reports.

The lobbyist was allowed to leave the halfway house to work in his Annapolis office during the day, but returned at night and on weekends.

Under the terms of his confinement, Bereano was not allowed to visit the State House or legislative office buildings, but continued to lobby by phone or over meals with lawmakers.

"It's really a testament to the relationship I have with my clients," Bereano said. "These are clients who have stuck with me throughout the whole ordeal. I worked real hard and was able to satisfy them this past session."

`Remarkable commentary'

Kathleen S. Skullney, executive director of Common Cause/Maryland, which advocates stricter ethics laws, said Bereano's performance over the past six months speaks volumes about the ethical culture of the State House.

"It's a remarkable commentary on the lobbying industry, and especially the inner circle of lobbyists in Annapolis, that an individual convicted of a felony continues to be regarded as an influential and persuasive messenger of special interests," Skullney said.

The amount that special interests pay to influence Maryland legislation has zoomed upward in recent years.

Twenty years ago, lobbyists reported expenditures totaling $2.8 million. For the year ended Oct. 31, 1998, that number had climbed to $22.8 million. Final numbers for the current year will be available after lobbyists file reports this fall.

Some lobbyists' reports were not filed or not available yesterday, so it was impossible to determine the total spent on lobbying during the six-month period.

But the reports that were filed showed that lobbyists continued to entertain lavishly even as the General Assembly was enacting a stricter ethics law designed to place greater distance between lawmakers and special interests.

Bereano, for example, reported giving hockey and basketball tickets worth $5,580 to three delegates -- $1,900 worth to Talmadge Branch, $1,650 worth to Tony E. Fulton and $2,030 worth to Nathaniel T. Oaks, all Baltimore Democrats. The lobbyist also gave one $50 Washington Redskins ticket to Sen. Arthur Dorman, a Prince George's Democrat.

Under the new ethics law, which will be in effect during next year's legislative session, Bereano would be prohibited from giving such tickets to lawmakers.

Ringling Brothers and Barnum & Bailey Circus handed out more than $4,300 in tickets to dozens of legislators as part of its successful effort to kill a bill that would have banned the use of circus elephants in Maryland. And the National Aquarium in Baltimore, which receives substantial state subsidies, gave out about $3,000 in free tickets to lawmakers.

Companies and some lobbyists also continued to spend on receptions for legislators.

The lobbying firm of Gerard E. Evans and John R. Stierhoff reported spending $14,162 for a reception on the final day of the session at their Annapolis office -- a party they threw on their own behalf, not for any client.

Baltimore lawyer Peter G. Angelos spent more than $24,500 for two dozen separate meals for committees and individual lawmakers in his effort to gain passage of a bill to lift a cap on damages in certain legal cases involving asbestos poisoning. That means that Angelos spent, on average, more than $130 to wine and dine each of the 188 members of the Assembly. Nonetheless, the bill died.

But it was the electricity deregulation issue that drew the heaviest lobbying, with at least 20 well-paid advocates pushing for passage of the bill.

Michael Delaney, a spokesman for BGE, said much of the company's expenditure went to a public education campaign aimed at the company's 1.1 million customers, including a four-page advertising supplement in The Sun.

"It just cost a lot of money to reach a lot of people," Delaney said. The spokesman added that the cost of the lobbying campaign will be borne by the stockholders, not ratepayers.

Delaney said the company was pleased with the legislation that was passed and signed into law. The measure will eventually force residential and business customers to choose which company supplies their electricity.

"So far, it looks like it's been a pretty good investment," Delaney said.

Dissenting voices

Michael Travieso, Maryland's people's counsel, said the flood of corporate spending swept away his agency and other opponents of the bills.

"It's not going to be possible for consumer groups, low-income groups and environmentalists to spend a million dollars on lobbying efforts," said Travieso, whose office represents the interests of residential ratepayers before the state Public Service Commission.

The Maryland Public Interest Research Group, a grass-roots environmental and consumer-advocacy group that was the chief opponent of the deregulation bill, paid its two staff members $7,841 for the session, with deregulation being just one of the issues they were tracking.

Other groups against the deregulation bill paid smaller amounts or had advocates who worked for no compensation.

Common Cause's Skullney said she was not surprised by the overwhelming amount of money spent by corporations that stand to capitalize from electricity deregulation.

"The more important the legislation is to the interest involved, the bigger the lobbying expenditures," Skullney said. "No wonder there is a perception that what the little guy wants is never going to make it in the end."

Sun staff writer Greg Garland contributed to this article.

(Photo by Sun photographer Doug Kapustin)