Is the contract in the public's interest or in the special interest of the mayor?

It’s unclear whether the City of Baltimore is losing money or making money with a new contract with Baltimore Gas and Electric, as opposing side are putting forth their own facts. 

Mayor Brandon Scott on Wednesday pushed through a new contract with BGE under protest by the City Council President and Comptroller, allowing the private utility to access the city-owned underground conduit without paying the city fees, but by paying for conduit repairs. 

Scott claims the city currently loses $7 million annually on the 741-mile network of wires that power street lights, traffic signals, phone and internet services once maintenance costs are compared to the network’s revenue. 

But the president of Commercial Utilities, the company with a city contract to maintain the conduit, says that’s not the case. 

The mayor says the new agreement will help with the alleged revenue loss, voting with two other members of the Board of Estimates to approve the contract. City Council President Nick Mosby and Comptroller Bill Henry skipped the meeting to prevent a quorum needed to vote. 

But Scott claims he only needed three members to vote, so he went ahead with approving the contract. 

Mosby and Henry claim he broke city law by doing so, and the contract should be considered invalid.  

They have asked Maryland Attorney General Anthony Brown to weigh in on whether there was a quorum and a legal vote. 

Under the agreement, the city would stop charging BGE access fees, currently estimated to be $28 million per year.  

Instead, the utility would pay for $134 million in improvements between 2023 and 2027, and would pay an annual occupancy fee of $1.5 million, The Baltimore Banner reported. 

Scott’s administration has argued that without the $7 million the city loses each year on upkeep, the new contract will be a win for Baltimore residents. 

He also said the contract will lower costs for ratepayers, since the utility had been passing on maintenance costs in customer bills. 

However, Mosby argued, this agreement gives a private institution undue say over the conduit’s repairs and priorities, and BGE isn’t required to follow the same equity guidelines as official city projects. And it lacks transparency. 

Mosby has argued the administration was rushing into the agreement, lacking details about how the administration settled on the new contract. 

In November, as Scott was considering privatizing the system, voters overwhelmingly passed a measure to ban selling the network to a private company. The vote signaled that this topic would be a controversial one, yet Scott moved quickly, approving the contract just one week after coming to an agreement with the utility. 

"The proposed underground conduit system agreement with BGE, which we believe allows BGE to reduce its fee structure and receive complete control of capital improvements, warrants time for public discussion and a thorough explanation as to the full impact this will have on the people of Baltimore now and in the future," Henry and Mosby wrote in a statement. 

Siding with Scott, Acting Solicitor Ebony Thompson said there is a “strong misconception” that the deal would lessen the city’s control over the conduit.  

Scott’s administration has argued that the city had to act quickly on the deal before the utility begins a rate case before the Maryland Public Service Commission in a few days.  

But Councilman Eric Costello was among elected officials who have argued that the city is moving ahead with a false sense of urgency.  

He said the administration’s claim that the deal must be sealed before BGE’s rate case is “patently false.”  

One side says the contract saves the city money, the other says the utility reduces its fee structure. One side says the city maintains control over the conduit, the other says BGE receives control of capital improvements. One side says the contract was voted on and approved, the other side says no legal vote took place. 

Whichever side prevails, what’s clear is there’s a lack of transparency and tens of millions of dollars at stake. 

 

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