Baltimore spending board approves BGE conduit deal despite effort by two members to delay vote

Baltimore’s mayor-controlled spending board pushed through a controversial agreement with Baltimore Gas and Electric Wednesday, proceeding with a vote over the protests of the comptroller and City Council president, who sat out the meeting in an effort to force its cancellation.

The contract at issue would allow BGE, a private utility, to receive access to the city-owned underground conduit by paying for repairs to the network instead of directly paying city fees, terms that have drawn backlash in some corners of city government in light of last year’s citywide vote barring privatization of the system.

And although Mayor Brandon Scott and two of his appointees pushed forward with a vote approving the contract at Wednesday’s Board of Estimates meeting, the two absent board members, Council President Nick Mosby and Comptroller Bill Henry, argued in a news conference afterward that the administration defied city law by pushing the contract through in their absence. The decision, therefore, should be considered invalid, they said.

The dramatic chain of events at Wednesday’s spending board meeting opened with a statement announcing Mosby and Henry’s absence. The two members had been informed the night before the administration intended to invoke new rules to override their request to delay the vote, leaving them “no other recourse than to remove” themselves from the meeting.

But while the board briefly recessed after the statement, Scott, Acting City Solicitor Ebony Thompson and Department of Public Works Director Jason Mitchell resumed the meeting a few minutes later. The two absences constituted abstentions, Thompson said, which count towards the five votes needed for a quorum, allowing the meeting to move forward.

“This is not the way we should operate, but today we are left with no choice but to do it this way,” Scott said as the meeting reconvened. Thompson then read off the terms of the BGE agreement, and the administration representatives voted to approve the contract, recording three votes in favor and two abstentions.

“The residents of Baltimore can trust that I will always do what’s right, and what’s morally grounded, in the right, ethical way,” Scott said. “I want to reaffirm that the right thing to do — not the politically right thing to do, but the right thing to do — is to move forward with this agreement.”

Outside City Hall after Wednesday’s board meeting, Henry, Mosby and several other council members decried the board proceedings and blasted the mayor for pushing the BGE deal through without adequately informing the public of its ramifications. They argued the decision was illegitimate since the board never reached a quorum, and asked Attorney General Anthony Brown to weigh in on what the law requires.

“There was no meeting. This item has not yet passed,” said Henry, who suggested that the legitimacy of Wednesday’s board vote may have to be settled in court. He added that he has yet to find a single elected official besides the mayor who thinks that the deal with BGE is both a good idea and one the city should act on immediately.

Scott has shown he is not only fine with circumventing the will of Baltimore voters, Mosby added, but also “appears to be fine with conducting business in a manner that abuses the power” entrusted to him by his constituents.

Under terms of the contract, BGE would no longer directly pay the city access fees in exchange for paying for $134 million in system improvements during a four-year period between 2023 and 2027. The power company would also pay Baltimore an annual occupancy fee of $1.5 million, terms the administration has argued would deliver a win for Baltimore residents, since they have reported that the city loses $7 million a year on upkeep of the aging system.

The capital improvement agreement will lessen the impact on customer bills, the company said in a statement. Previously costs were a maintenance fee, which were required to be passed onto customers. Under this new agreement, BGE will recover the capital contributions in rates over time which reduces the impact on customer bills.

The deal with BGE has been public for less than a month, but Scott’s administration has argued that the city must act immediately to cement terms ahead of the utility’s rate case before the Maryland Public Service Commission, slated to begin later this week. Scott and Thompson have argued that the new agreement will result in more overall investment into the conduit and a decrease in administrative costs and liability for Baltimore while “allowing the city to maintain 100% ownership of the conduit.”

A 741-mile underground network of wires that power street lights, traffic signals and phone and internet services, Baltimore’s conduit system has become the center of fierce criticism toward the mayor from Mosby and other council members since the weeks before Election Day, when Baltimoreans were set to vote on whether the city should ban the sale or privatization of the system.

The Scott administration pursued a contract in early October with a consultancy firm to evaluate the future of the conduit. Mosby successfully deferred the vote until after the election, when the measure banning the sale of the conduit passed overwhelmingly.

At a four-hour hearing last week, the council president and other officials denounced what they described as a lack of transparency and communication from the Scott administration about the BGE deal. Other entities have chimed in with dissatisfaction as well, including conduit users Comcast, Quantum Telecommunications, Inc. and Crown Castle, which sent a letter to Scott shortly before the hearing that listed concerns about the agreement being reached without their involvement.

And the night before Wednesday’s meeting, a group of council committee chairs, including Mosby, Eric Costello, Sharon Middleton, Isaac “Yitzy” Schleifer, Robert Stokes, Danielle McCray, and Mark Conway sent a letter to Scott asking him to remove the agreement from the spending board agenda.

Mayor Scott responded to the council members with a letter of his own that evening, writing that the group is “recycling the same disinformation that has been debunked time and time again.”

“To argue at this point that the agreement has not been scrutinized is untethered from reality,” he wrote. “Perhaps no agreement in recent memory that this City has entered into has received more scrutiny than this one.”

He cited the marathon hearing last week and hours of briefings from the administration for the council and comptroller. “None of this was required, of course,” he noted. “But my administration has chosen to make its officials available for hours upon hours of questions, not only because I value transparency, but because this is a good deal.”

BGE uses about 75% of the city-owned conduit, paying $2.20 per foot, a rate approved by the Maryland Public Service Commission, which translates to payments of about $28 million in fees a year, Thompson has said.

In a statement after Wednesday’s meeting, BGE said its agreement with the city will alleviate costs for ratepayers, since previous terms required the utility to pass maintenance costs along in customer bills.

Other elected officials have argued that the city is moving ahead with a false sense of urgency. At the press conference following the meeting, Costello said the administration’s claim that action must take place ahead of BGE’s rate case is “patently false.” Other jurisdictions have worked with their local utilities to jointly request rate case deferrals from the Public Service Commission, he said, a route that Baltimore has opted not to take.

“I cannot even begin to describe how profoundly disappointed I am and my colleagues are at how this has played out,” the councilman said.

The vote was also criticized by state Sen. Mary Washington, who briefly was a candidate for mayor in 2020.

“The Mayor’s style of management has relegated strong senior staff to cleaning up after the debacle of the week, demotion to subordinate roles, or catching the first train out of town,” she wrote on Twitter.

Scott’s administration, however, has held firm in its arguments that the conduit contract needed to be in place before the start of BGE’s rate case. Thompson said that Wednesday’s meeting was able to proceed because of long-established Board of Estimates rules, and the acting solicitor expressed no concern that Wednesday’s decision could be rendered invalid due to the circumstances of the vote.

The mayor suggested that the city ran the risk of being sued by BGE, which has taken Baltimore to court in the past, if it didn’t seal the contract immediately. Asked whether the utility was prepared to sue over the issue, Scott said chances were “very likely” that the city ended up back in court.

The City Council’s second investigative hearing on the conduit deal is scheduled for later this month, ahead of the next Board of Estimates meeting, Henry noted.

“So this may solve itself,” the comptroller said. “Or they may dig their heels in and choose to die on this hill.”

All other agenda items at Wednesday’s Board of Estimates meeting were deferred to a later date.

adam.willis@thebaltimorebanner.com

emily.sullivan@thebaltimorebanner.com