Top Utilities Regulator Resigns
O'Malley Had Threatened to Fire Ehrlich-Appointed Chairman

By John Wagner and Ovetta Wiggins
Washington Post Staff Writers
Tuesday, January 30, 2007; B03

Maryland's top utilities regulator, Kenneth D. Schisler, resigned yesterday under intense pressure from Gov. Martin O'Malley, who said he would use the opportunity to make good on a campaign promise to create a more consumer-oriented agency.

With Schisler's departure, O'Malley will have two immediate appointments, effectively giving Democrats control of the five-member panel.

The Public Service Commission came under criticism last year for approving soaring electricity rates. O'Malley and other Democrats seized upon that development to portray Schisler, the panel's chairman, and then-Gov. Robert L. Ehrlich Jr. (R) as being too cozy with the large utilities Schisler's panel regulates.

In recent days, the new governor had publicly threatened to fire Schisler, a former Republican delegate from the Eastern Shore, if he did not step down from the post he was given by Ehrlich.

"We are thankful that Mr. Schisler stepped aside, allowing the Public Service Commission to move forward," O'Malley spokesman Rick Abbruzzese said in a statement. "There is no time to waste getting professional regulators back on the job -- to protect consumers and restore stability for businesses."

Republicans said Schisler had been turned into a scapegoat for a situation that was largely out of his control. They argue that a failed effort at deregulating the electricity industry by the heavily Democratic legislature was responsible for the rate increases of recent years.

"I think [Schisler] was victimized for partisan, political reasons," House Minority Leader Anthony J. O'Donnell (R-Calvert) said. "The whole specter of this situation is quite honestly sickening to me."

The PSC's approval last year of a 72 percent rate increase for customers of the state's largest electricity supplier prompted a special session of the General Assembly to provide rate relief and became lively fodder on the campaign trail, with O'Malley accusing Ehrlich of allowing consumers to be "gored" and Ehrlich countering that O'Malley was engaging in "pseudo-populism."

Schisler's resignation, which will be effective Friday, averted what many in Annapolis predicted to be an ugly legal fight over the panel's leadership. To remove Schisler before his term expires in July 2008, O'Malley would have been required to assert that Schisler had engaged in incompetence or misconduct, a finding Schisler could contest in court.

O'Malley aides had indicated they were prepared to make an issue of news reports last year that industry officials arranged social events for Schisler, including a hunting trip in Texas.

Abbruzzese said O'Malley intends to move quickly to fill both Schisler's position and another vacancy on the panel. Members serve five-year terms. One of the other three sitting members, Harold D. Williams, was appointed by Gov. Parris N. Glendening (D) shortly before he left office.

Schisler's resignation letter to O'Malley was one sentence long. In a statement posted on the PSC Web site yesterday, Schisler said he had "endeavored to implement the policies enacted by the General Assembly in a fair, impartial and effective manner."

"My resignation will facilitate the ability of the Public Service Commission to move forward in the important work it must accomplish," Schisler said. "I wish my successors well." He would not comment further.

Had Schisler remained on the commission, the legislature was preparing to diminish his influence. A bill drafted by Sen. Thomas M. Middleton (D-Charles) would have expanded the number of PSC members as a means to give O'Malley appointees effective control of the panel.

Schisler's departure was welcomed by the presiding officers of both chambers of the legislature.

Senate President Thomas V. Mike Miller Jr. (D-Calvert) said O'Malley now has a chance to put his imprint on the PSC.

"I think it's an opportunity to establish a new identity for the commission, establish stability for utility companies and consumers," said House Speaker Michael E. Busch (D-Anne Arundel).

During his campaign for governor, replacement of the chairman was only one in a list of pledges O'Malley made regarding the PSC, which has jurisdiction over utilities in the state including gas, electric, telephone, water and sewage disposal.

O'Malley promised to implement a two-year waiting period between the time any official from a regulated industry has business before the commission and the time he or she could become eligible for appointment to the agency.

O'Malley said he would also require quarterly reports disclosing all contact between PSC members and industry representatives.

© 2007 The Washington Post Company