Kenneth D. Schisler, who as chairman of the Maryland Public Service Commission (PSC) has been increasingly at odds with the General Assembly and new governor, resigned last week. Schisler’s resignation followed the resignation of Patricia A. Smith, Maryland’s top advocate for utility customers, who left her post in mid-January.

State Senate President Mike Miller told the Baltimore Sun he had “tried but failed” to negotiate an amicable settlement under which Schisler would leave his post as chair of the PSC. Ralph S. Tyler, chief counsel to Democratic Gov. Martin O’Malley, told the Sun that O’Malley was “inclined to fire Schisler” if he had not resigned. O’Malley was elected last November after defeating Republican Gov. Robert Ehrlich.

“We’re not going to be brokering any deal with Mr. Schisler,” Tyler told the Sun. “We would probably be moving forward with termination proceedings.”

The Office of the People’s Counsel (OPC), which Smith headed, and the PSC came under fire last year over a 72% electricity rate increase proposed by Baltimore Gas & Electric (BGE) (see NGI, June 26, 2006; June 19, 2006). Schisler in particular enraged some lawmakers after some of his e-mails were disclosed, which apparently revealed he had discussed internal PSC policies with a utility company lobbyist, the Sun noted.

The rate hike proposal culminated with Maryland’s majority Democrats voting to override Ehrlich’s veto to limit pending rate hikes for BGE customers to 15% through May 31. Following the veto override, the General Assembly attempted to fire all of the PSC members and Smith through legislation. Schisler, who was appointed by Ehrlich in 2003, sued to keep his job, and the legislation to replace the PSC members ultimately was struck down by the Maryland Supreme Court.

The OPC’s Smith resigned in early January following a three-year tenure. Under Smith, the OPC called for changes in the state’s deregulation laws. It also pursued an investigation into the BGE rate hike. However, Smith was accused of not doing enough to protect consumers before and after the rate hike was announced.

Paula Carmody was appointed OPC Counsel on Jan. 17, subject to state Senate approval. Carmody served most recently as an assistant attorney general in the Consumer Protection Division, Office of the Attorney General, beginning in 2004. While there, she was responsible for investigating violations of and enforcing Maryland’s Consumer Protection Act and related consumer protection laws.

The actions by the PSC and the General Assembly last year were partly to blame for the failed merger between FPL Group and the Constellation Energy Group (see NGI, Oct. 30, 2006).

“I would love to say [ours] was a totally unique [situation], but in light of other recent events I think we have to look harder at the state regulatory and political environment… But I’m not sure anyone could have anticipated everything that happened in Maryland,” FPL Group CEO Lew Hay said at the time. “I can assure you if we ever get a deal going forward we’ll look harder at that. Both we and Constellation looked at all the circumstances leading up to what happened in Maryland and had comfort that it was manageable. Maybe this really was the perfect storm of election dynamics and the merger and a one-time giant rate increase.”

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