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July 1, 2009

O'Malley's doublecross of Constellation

Today's column begins:

You don't need to be a lawyer to understand how Gov. Martin O'Malley's Public Service Commission is flouting the law. Rarely is the difference so bright between what is permitted and what is perpetrated.

The law, signed by O'Malley in April 2008, lets the commission review deals by electric utility owners only if a transaction would give somebody at least a fifth of the shares or a fifth of the board seats at the owner corporation. The red, octagonal "STOP" sign at the end of my street is a similar example of clear legal language.

But the commission claims the power to reject Electricite de France's plan to invest in BGE parent Constellation Energy even though the French company would get only one out of more than 10 board seats and owns fewer than 10 percent of the shares. The decision demonstrates stunning bad faith by Maryland as well as O'Malley's increasing desperation to be seen as keeping campaign promises to lower electric prices.

Here is the relevant language from the law. Like I said, clear as day:

FOR THE PURPOSES OF THIS SUBSECTION, A PERSON MAY NOT BE CONSIDERED TO HAVE ACQUIRED, DIRECTLY OR INDIRECTLY, THE POWER TO EXERCISE ANY SUBSTANTIAL INFLUENCE OVER THE POLICIES AND ACTIONS OF A GAS AND ELECTRIC COMPANY IF THE PERSON:

(I) AFTER ANY ACQUISITION OF VOTING INTERESTS OF A
COMPANY THAT OWNS OR CONTROLS A GAS AND ELECTRIC COMPANY, DIRECTLY
OR INDIRECTLY, OWNS, CONTROLS, OR HAS THE RIGHT TO VOTE, OR DIRECT
THE VOTING OF, NOT MORE THAN 20% OF THE OUTSTANDING VOTING
INTERESTS OF A COMPANY THAT OWNS OR CONTROLS A GAS AND ELECTRIC
COMPANY; AND

(II) DOES NOT HAVE THE RIGHT TO DESIGNATE MORE THAN
20% OF THE BOARD OF DIRECTORS OR OTHER GOVERNING BODY OF A COMPANY
THAT OWNS OR CONTROLS A GAS AND ELECTRIC COMPANY.

Posted by Jay Hancock at 10:26 AM | | Comments (10)
Categories: BGE/electricity
        

Comments

You left out the rest of the law. You should be responsible enough to cite the entire operative statute, and not just the provisions that support your opinion. The entirety of section 6-105(e) is at play.

mdenergygal - can you direct us to the areas in the full text that you are citing?

Great article Jay!

what does the rest of the section 6-105(E) say about this ?

We need a governor who rules by law and cares for all citizens not just those who voted for him. O'malley is still for populistic get me elected governing and really cares less about our future and the future of the state.

We need a governor who rules by law and cares for all citizens not just those who voted for him. O'malley is still for populistic get me elected governing and really cares less about our future and the future of the state.

Jay,

How about a link to the entire statute?

Then we can see if you are quoting one subsection in or out of context, and/or if other parts of the law, addressing other matters, might apply.

And quit the all caps thing. Many people find it difficult or impossible to read text in all caps.

O'Malley and the legislature aren't going to be happy until Constellation says "enough is enough" and takes its operation, its jobs, and the city's only Fortune 500 business up I-95 to Wilmington.

Way to keep Maryland "business-friendly", fellas.

mdenergygal - throw us a bone here about how you read 6-105e. Hmm-maybe there really isn't a bone to throw at all? We'd love to see your side.

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Wednesdays and Fridays.
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