Maryland Electricity and Wall Street

The Washington Times (my favorite newspaper) has an article in which Wall Street weighs in on the State General Assembly's approach to solving the problem.

In short they are saying, be careful you are headed the way of California.

Wall Street credit-rating agencies are warning that Washington-area power companies could sink into financial trouble if lawmakers bar them from recouping their soaring fuel costs through rate increases.

Most of the area's utilities face downgrades of their credit ratings -- which means more difficulty raising the funds needed to keep subsidizing ratepayers and pay for increased power in the future -- as a result of proposals in the Maryland legislature to roll back rate increases ranging from 40 percent to 72 percent.

The legislature is moving in a "dangerous" direction that is reminiscent of missteps taken by the California Legislature that pushed the state's two largest utilities into insolvency in 2001 because they were barred from passing through to consumers skyrocketing fuel costs, said Ellen Lapson of Fitch Ratings Ltd. In the California case, the state ultimately had to take over purchases of power on behalf of the insolvent utilities and sustained record budget deficits that plunged its own finances into disarray. "In Maryland, it's Democrats versus Republicans, and everybody hates each other. A lot of people are making political points. It's not a good environment for the financial health of utilities," Ms. Lapson said.

Now isn't it time to stop playing games and work on a real solution? Their will be real payback if Maryland ruins the industry and we face rolling black outs.

The Times has related article, BGE lambastes state lawmakers

Baltimore Gas & Electric Co. (BGE) executives say state lawmakers are "overplaying their hand" by trying to negotiate lower electric bills with threats to block the company's multibillion-dollar merger with a Florida utility.

Sounds like we are at an impass to me.