Conduit deal with BGE decried by lawmakers and questioned by Comcast and other users
Councilmembers point to language in the deal giving the company “sole discretion,” prompting Scott officials to argue that it also mandates “monthly meetings”
Above: Baltimore DOT’s Corren Johnson holding up an example of Baltimore conduits at City Council hearing. (CharmTV)
A dozen users of Baltimore’s conduit system are asking that Mayor Brandon Scott respond to their concerns before signing a deal that would turn over future conduit improvements to Baltimore Gas & Electric.
Signed by Comcast, Crown Castle and 10 smaller communication companies, the letter raises sharp questions about the mayor’s plan, with one company official telling The Brew privately, “This took us totally by surprise. We were never briefed on this.”
The existence of the letter was announced with a flourish by City Councilman Eric Costello at a special investigative hearing he chaired in which Acting City Solicitor Ebony Thompson was taken to task.
“How can we trust what you say?” Council Vice President Sharon Green Middleton asked Thompson during the often-heated session that lasted late into Thursday night.
”The agreement has been sold by the administration as a positive thing without saying [electric] rates will rise,” said Costello.
The controversy, which has sprouted numerous political, legal and digital equity subplots, started after The Brew published a secret draft agreement between the Scott administration and BGE.
Under the agreement, which was subsequently sweetened by BGE, the Scott administration would terminate the occupancy fee it charges BGE for use of the city-owned labyrinth of vaults and underground pipes that carry electric lines to homes and businesses.
In return, BGE would invest $120 million in future conduit improvements.
The proposed pact would end a century-old fee system that currently brings the city $28 million in annual revenue to maintain the infrastructure.
BGE occupies 76% of the underground network, while Comcast, Crown Castle and others use the remainder and collectively pay $9 million in fees.
The $9 million occupancy fee charged to non-BGE users will remain, while the city would collect a $1.5 million yearly “maintenance fee” from the electric company.
The letter submitted to Scott raised a number of questions about this arrangement, including criticism that it loosely defines how BGE would allocate the $120 million it promises to spend to upgrade the network over the next four years.
”Will other conduit users be permitted to repair their existing facilities,” the letter asks, and will BGE be held accountable for service disruptions or damage to other users?
“The agreement was reached without our involvement” – letter from companies that use the conduits.
The letter further asks Scott to explain how the arrangement is “equitable” and ensures “non-discriminatory and neutral access” to current and future users.
It concludes by calling it “essential” that these issues be discussed and adequately addressed before the city enters into a binding agreement with BGE.”
The wording raised the possibility of a lawsuit if Mayor Scott proceeds – as he has promised to do – at the February 15 Board of Estimates meeting.
Thompson told the Council that a quick approval was needed so that BGE can incorporate the agreement’s capital costs when it applies to the Maryland Public Service Commission (PSC) for a general rate increase on February 17.
Conway: “Slow down!”
Councilman Mark Conway pleaded with Thompson to “slow down” the process and to ask BGE to delay its rate submission to the PSC until the Council has had time to digest the agreement.
Thompson indicated that Scott had no intention of changing the present timetable.
As one of the mayor’s two appointees to the Board of Estimates, Thompson can vote on the pact and assure Scott of winning approval. (The mayor’s other appointee is DPW Director Jason Mitchell.)
At the hearing, Thompson was repeatedly put on the defensive by Council President Nick Mosby and other lawmakers, all of whom expressed varying degrees of skepticism about the agreement.
Mosby charged that the pact “opens Pandora’s Box” in the name of capital improvements.
He voiced outrage over its disregard of voters’ approval of a charter amendment last November prohibiting the sale, transfer or franchise of the conduit system.
Thompson repeatedly described the deal as a win-win situation by increasing private investment in an aging system while reducing the public’s overhead and liability costs.
“This agreement requires that BGE and the city work in good faith,” she said.
The issue of the city losing control of the conduits and broadband accessibility came up repeatedly.
“While they have the final say, we do have monthly meetings” – Ebony Thompson.
After Costello, for example, read a passage that gives BGE “sole discretion” to determine what conduit programs will be funded regardless of the city’s priorities or input, Thompson invoked the monthly meeting clause.
“While they have the final say, we do have monthly meetings where we prioritize and define the scope of work,” she noted.
Other parts of the agreement specify that BGE, not the city, has the exclusive power to determine where and when capital funds are spent.
At the end of the hearing, which included a denunciation of the agreement by Kevin Johnson, whose Commercial Utilities group now handles conduit construction for the city, the Council voted to subpoena revenue and maintenance figures from the city.
Costello then announced that the investigative committee will reconvene on February 23.
That would be nine days after the BGE deal is expected to be signed, sealed and delivered by the mayor.