BGE offers more money to clinch conduit deal as City Council announces a hearing
The Scott administration will not release text of the agreement until the Board of Estimates vote – meaning it will be approved without public scrutiny
Above: Last August, Mayor Brandon Scott and BGE President and CEO Carim Khouzami survey storm damage. (Facebook)
BGE has upped the ante in its bid to win functional control of Baltimore’s conduit system – a 700-mile underground transmission system that voters said three months ago should remain in public hands.
The Scott administration confirmed that the utility has agreed to spend $3 million more a year on capital improvements than the amount indicated on a draft of the agreement disclosed by The Brew last week.
A mayoral spokesman took pains to say the new numbers were not, in effect, an attempt by the parties to sweeten the deal amid public criticism following the Brew article.
The draft agreement was denounced as a “sellout” by former Mayor Bernard C. “Jack” Young and by members of the city’s own conduits staff as “lopsided in all aspects.” Councilman Zeke Cohen said he saw in the pact “no upside” for Baltimore residents.
“Yes, Baltimore Gas & Electric has increased its contribution from the preliminary draft agreement. This increase was the result of negotiations that took place prior to the publication of the story by The Brew,” said Jack French, who became Mayor Brandon Scott’s senior spokesman last week.
• Documents: Charter amendment blocking sale of Baltimore’s conduits and BGE’s proposal to end its franchise fees to the city (1/27/23)
“BGE will undertake $134 million over the next four years in capital improvements and $1.5 million annually for maintenance, bringing the total investment to $34.5 million annually,” French said.
BGE currently pays $28 million a year to occupy the majority of the underground pipe system.
Under the existing agreement, the city is entitled to increase occupancy fees by 36 cents a linear foot.
Exercising that option would require another $4.5 million from BGE, for a total of $32.5 million a year.
That amount would be virtually the same as BGE’s new offer when all contingencies are evaluated, according to the report done by the conduit staff.
Strikingly, the Scott administration wants to keep the franchise fee system intact for the other users of the system.
They include Comcast, Crown Castle, Verizon and the University of Maryland, who collectively pay the city about $9 million a year to rent space for their fiber optic and telephone lines.
Scott Won’t Release Agreement
Despite its sweeping nature and the possibility that it violates the amended charter, the BGE agreement will be kept under wraps until the day it is signed, French said.
The mayor is not at liberty to release the agreement beforehand because negotiations are ongoing.
As a result, French said, the text of the agreement will be publicly available by the day it is slated to be approved by the Board of Estimates, now set for February 15.
“BGE Contract Deal Not What Baltimore Voted For” is the title of next week’s City Council hearing.
BGE’s offer of more money came as the City Council said it would convene a special hearing to examine the plan.
“BGE Contract Deal Not What Baltimore Voted For” is the title of the public hearing scheduled for next Thursday (February 9) by the Rules and Legislative Oversight Committee.
Last November, city voters passed by a 3-to-1 margin a ballot measure that banned in perpetuity the sale or lease of the municipal conduit system.
Mayor Scott has defended the BGE plan as neither a sale nor a lease, and said it is within the law because the city would retain ownership of the conduits.
The law department has not issued a finding as to the agreement’s legality.
In 2019, as president of the City Council, Scott supported the move to bring the question of keeping the conduit system public to voters.
Brew questions not yet answered by Mayor Scott:
• Having voted for the introduction of a charter amendment banning the “sale, transfer or franchising” of the conduits, why are you now giving a private company more control of it?
• How does this agreement not represent circumventing voters’ wishes as expressed in the charter amendment?
• Please provide whatever memorandum the law office has prepared, analyzing how the agreement could be approved given the language in the charter amendment?
Mosby Faults Plan
City Council President Nick Mosby yesterday joined Young, former Mayor Sheila Dixon, Councilman Cohen and Comptroller Bill Henry in questioning the plan.
“Any such agreement – whether it leads to a sale or inks a deal like this one involving a single company – must be evaluated with full transparency to ensure accountability,” Mosby said.
He wondered why the Scott administration was rushing into an agreement with BGE before a consultant study it commissioned last November to determine the best use of the conduit system was completed.
It remains unclear how Mosby, the City Council or the public will get any answers if Scott sticks to his position that information cannot be released before the BOE approves the agreement.
The mayor controls the spending board through his vote and the votes of his two appointees – Acting City Solicitor Ebony Thompson and Public Works Director Jason Mitchell. (Mosby and Comptroller Henry are the fourth and fifth voting members.)
Thompson took over BGE negotiations after the departure of City Solicitor Jim Shea on January 13.
BGE’s legal team is headed David E. Ralph, who as Baltimore’s acting city solicitor in 2016 crafted the franchise agreement that BGE now wants to scrap.
Ralph was hired by the utility company in 2017 and has since been promoted to general counsel.
• Fern Shen contributed to this story. To reach a reporter: firstname.lastname@example.org