Rotunda Comments on Maryland Utility Regulation

The Maryland General Assembly passed legislation last spring that effectively fired members of the state's Public Service Commission, a move with far-reaching effects on state utility regulation.  However, a September court ruling overturned parts of the new law, but left intact language that bars the Commission from ruling on a merger between Constellation Energy and Baltimore Gas and Electric.  The merger plans included the return of some $386 million in rate reductions starting in 2007.  Professor Ronald Rotunda commented that, "In firing the PSC, the legislature, in effect, seized the authority to regulate the rates themselves."

"When the legislature changes the rules of the game after the game started, it interferes with investor-backed expectations," he said. "The utilities are guaranteed a reasonable rate of return on their property. You can't take that away without just compensation.?"

Merger Ruling May Cost BGE Customers More, Southern Maryland News Online, October 19, 2006. By Megha Rajagopalan.
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