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Rotunda on Lawmakers' Efforts to Void Contract with State

Recently passed legislation in Maryland that would lower electric rates for consumers could face a court challenge if Baltimore Gas and Electric parent company Constellation Energy Group's proposed merger with a Florida utility fails. Constellation is questioning the new law, which bars the company from collecting fees it was previously allowed to charge consumers with the hope of stemming skyrocketing electric rates. Opponents of the bill note that the fee was part of a previous agreement between Constellation and the state and can't be eliminated by lawmakers without due process. The article cites Mason constitutional law expert Ronald Rotunda:

"'The legislature cannot impair contracts, and an agreement with the state is a contract,' said Ron Rotunda, a professor of constitutional law at George Mason University.

"Rotunda said state lawmakers suffer from a conflict of interest when they seek to void contracts that they previously agreed to honor. Courts take a hard look at such cases, he said. Constellation also may be able to argue that it was denied due process when lawmakers sought to reduce BGE's rates."

CEG May Contest Electric Rate Cut, The Baltimore Sun, October 1, 2006.  By Paul Adams.
 
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