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February 17,  2006

 Toward the end of County Council's meeting the other evening, as attenders were putting on their coats and getting ready to vacate the premises, four additional resolutions came to the floor under the 'Article J' rule. That's a way by which Council, with agreement by a majority of its members can act on things not on its advertised agenda. That would be either something to deal with an emergency situation which had arisen after the agenda was prepared or, much more commonly, routine uncontroversial matters which, for one reason or another, are deemed not appropriate to be put off until Council meets again in two weeks.

Three of the items clearly fit the latter category and the fourth -- prosaically titled 'Authorizing the Execution of Certain Contacts' -- appeared at first glance also to do so. The referenced contract was a purchase order to provide for a redundant source of electricity for the Paul J. Sweeney Building, which is being constructed to house police and other emergency services.

Wait a minute, said Councilman Jea Street after he saw the bottom line -- $200,000 -- and the vendor -- Delmarva Power. As he does frequently, Street cut right to the heart of the matter by asking a simple and, when you think about it, an obvious question: "Are we paying a reasonable amount for what's going into this building?"

Called to respond, Richard Przywara, general manager of the Department of Special Services, which is responsible for putting up and equipping the building, explained that $200,000 was a negotiated figure -- "the best we could get," is how he put it. Although the expenditure was in the approved budget, county law requires Council approval because the contract was not put to competitive bidding. How could that be done, Przywara said, when Delmarva Power is the only source of back-up electricity in this area.

In the end, Street stood alone in voting against the resolution. His colleagues could hardly resist Przywara's explanation that a source of reliable power -- which battery-generated electricity may not be -- is essential if the 9-1-1 and other emergency communications are not to go out when they are most needed. "There is no other provider who can do this," he said. Councilwoman Karen Venezky, who guards the purse strings as chair of Council's finance committee, said she had no idea if $200,000 was the best price or even a reasonable one. "We have to take it at face value; this is something that needs to be done," she said.

While there is no doubt that Street does not want 9-1-1 to go dark, either, his probing put into sharp focus the fundamental issue apropos the panic emanating from Delmarva Power's announcement that, come May 1 when utility deregulation takes hold and the moratorium on raising electricity rates expires, it's going to sock residential customers with an unprecedented -- and, one might say, obscene -- 59% rate hike.

Everyone -- even government -- is at the mercy of the power company.

State politicians are scurrying to find out what, if anything, they can do to mitigate the situation. A lot of people are asking how members of the General Assembly could have been so naive six years ago as to think that an unregulated profit-driven utility would not be out to grab all it could as soon as it could. Equally naive was their reliance on the prospect of competition coming along to keep things under control. It should have been obvious that mom-and-pop generators could hardly provide an effective counterbalance even if a market as small as Delaware attracted them. There really is no viable competition for an entrenched monopoly.

There is talk of reregulation with Terry Spence, speaker of the state House of Representatives, and Wayne Smith, leader of its Republican majority, leading the charge. An attempt to go that course would certainly provoke an extended court battle and it's a reasonably safe bet that our much esteemed but business-savvy Court of Chancery would look askance at such a reaction. State treasurer Jack Markell has called for an investigation into whether Delmarva Power, a retailer of electricity and natural gas, has looked hard enough to find the best deal for buying the electricity it's distributing -- especially when you consider that Conectiv Energy, a wholesaler, is its present source of supply.

Both Delmarva Power and Conectiv Energy are wholly owned subsidiaries of Pepco Holdings Inc., a Washington, D.C., company. Pepco -- a descendent of Potomac Electric Power Co. -- recently increased its stock dividend rate to $1.04 a year, which can be considered a reasonable 4.4% return based on the current price of the stock. The company's reported profit for the nine months ended Sept. 30 -- apparently the most recent available -- was $289.6 million, a 15% increase from the comparable 2004 period. Total revenue figures are not included in the financial report posted on the Pepco website.

It may be worthwhile, although certainly sure to generate considerable anguish about preserving Delaware's kind-to-business reputation, to consider looking to impose an offsetting tax or fee on greedy utilities coupled with an allowable credit against state personal income tax as a way to provide at least a partial refund. A serious threat to move in that direction might well be sufficient to induce Delmarva Power finance people to sharpen their pencils and try again to be reasonable.

Meanwhile, there's an effort underway to assist low-income households pay their increased utility bills. Earlier in its session, County Council approved a resolution calling on the General Assembly to enact pending legislation to increase the amount of money available for individual grants to needy households by imposing surcharges on electricity and natural gas bills. Councilmen George Smiley and Joseph Reda and Councilwoman Patty Powell voted against that resolution.

After John Kowalko, of the Association for Community Organizations Now -- which goes by the acronym Acorn -- told Council's finance committee that similar programs are working in other jurisdictions and that the cost would be minimal, Smiley questioned the logic behind them. He argued that it was nothing more than a 'rob Peter to pay Paul' approach. There are a lot of moderate-income families being pushed to the limit of their means by an avalanche of increased costs of a variety of necessities, he said. It would amount to "hitting them with a mandatory fee on top of their higher utility bill" and that hardly makes sense, he maintained.

After a fashion, it mirrors benign Delmarva Power's appeal to its customers to contribute to the 'Good Neighbor Fund' administered by the Salvation Army. Those contributions end up in Delmarva Power's till by way of some of the company's more severely pressed customers.

In yet another related matter at its session, Council received without comment a proposed ordinance to provide an additional $650,000 to the Department of Special Services to cover budget shortfalls caused by higher motor fuel and energy costs. Of that, $500,000 is to come from reducing the tax stabilization reserve with the rest being transferred from the budget of the recorder of deeds.

 Meanwhile: The federal government is on the verge of one of the biggest giveaways of oil and gas in American history, worth an estimated $7 billion over five years. New projections, buried in the Interior Department's just-published budget plan, anticipate that the government will let companies pump about $65 billion worth of oil and natural gas from federal territory over the next five years without paying any royalties to the government.  MORE

 As they say, if there's a will there has to be a way. In an effort to block construction of a liquefied natural gas terminal in Fall River, Mass., legislators managed to mandate saving an old drawbridge with an opening too narrow for tankers that would bring it to the site to pass through. Now, the gas companies said it will just substitute smaller ships making more trips. At least that beats going to war with a neighboring state.  CLICK HERE to read the Boston Globe article.

 Although we'd rather not have to live that way, it seems that concrete barriers protecting government buildings and other places that might be tempting targets for terrorists are going to be around for a long time. So, why do they have to be eyesores? If you can make an object d'arte out of a clothespin, why not apply a little bit of creative imagination to concrete barriers. CLICK HERE to read a Boston Globe article about doing just that.

 Pretty-Boy Floyd may have been an exception. A pair of researchers have now discovered that criminals tend to be ugly. CLICK HERE to read a Washington Post article about that and other interesting research you ought to know about.

2006. All rights reserved.

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