Date: June 13, 2006

To: Senate Finance & House Economic Matters Committees

From: Heather D. Hamilton, Vice President of Government Affairs, Maryland Chamber of Commerce

Re: Special Session – Public Service Commission – Electric Industry Restructuring

On behalf of the Maryland Chamber of Commerce and our local chamber members, representing more than 20,000 small, medium, and large businesses across the State, I offer the business community’s strong opposition to the above-mentioned emergency legislation.

We have heard a great deal of impassioned discussion about what Maryland should do to help BGE residential customers spread out their electric rate costs over time. As the Maryland General Assembly discusses legislative alternatives, several key points must be considered to ensure that long-term unintended consequences are not overshadowed by short-term goals.

Over the last several months, because of Hurricane Katrina and other global events, Maryland residents and businesses have had to deal with increased costs in many areas, including fuel and energy costs. Electricity rates have risen not only in Maryland but nationally as well. While the percentage increase in electricity rates in Maryland is higher than many would like to see, these costs have risen in step with global fuel costs.

We urge the General Assembly to proceed with caution as it reviews this comprehensive legislation. Our members are very concerned that in a rush to achieve short-term relief, even if well-intentioned, the legislature could unwittingly do damage to Maryland’s business climate.

We want to see Maryland’s businesses grow and flourish. We believe that a healthy business environment is good for the citizens of this State. And, with history as our guide unfair policies drive businesses away. In fact, today, Maryland is home to only five Fortune 500 companies. Plus, many will remember a company that left Maryland. MBNA Corporation, now owned by Bank of America, left Maryland many years ago because of unfair policies and practices. Their move to Delaware was an unintended consequence resulting from past well-intended policies.

Stability and predictability are two key components that businesses need to operate efficiently and effectively and to compete in this global marketplace. An uncertain and insecure regulatory environment acts as a major deterrent to investment and entrepreneurship. From the business community’s perspective, the comprehensive legislation now being considered by the General Assembly creates an insecure regulatory environment that sends a signal not only to those within this industry but to the business community as a whole.

The State and national business communities are watching this legislation closely and Maryland’s overall legislative determinations on these complex business issues. An unprecedented attempt to severely impair a company within this State will warn other employers, who may be looking to locate or expand in Maryland, that this State’s government is hostile to business.

This legislation is not only about Constellation Energy and the utility industry, but it is also about the future business climate in Maryland. This State needs more strong, growing, and vibrant companies. They create jobs, and they give people the opportunity for wealth and career advancement. But Maryland’s prospects for retaining its companies and encouraging others to bring their operations to this State will be severely compromised if it is known as the State that looks down on success and holds businesses “hostage.” Businesses that play by the rules, should be rewarded, not punished.