Documents show Scott administration backed away from demanding minority participation and oversight of BGE conduit funds
BREW EXCLUSIVE: The city agreed to a non-disclosure agreement with BGE after Baltimore residents voted to ban the sale of the conduit system
Above: Former Baltimore city solicitor, now BGE general counsel David E. Ralph.
Minority and women’s business participation goals for tens of millions of dollars in future contracts: Not applicable.
Adherence to Baltimore’s local hiring law: Out the window.
The right to decide how much to invest in different city neighborhoods: Up to you, Baltimore Gas and Electric.
Documents obtained by The Brew under the Maryland Public Information Act show just how accommodating the Scott administration was in negotiating a conduit deal that the mayor now describes as “in the best interests of taxpayers.”
Emails and comparisons of the draft agreements further underscore the previously unknown role played by BGE’s David E. Ralph.
The onetime chief litigator and head of the Baltimore City law department, Ralph negotiated the last (2016) BGE conduit agreement on behalf of the city.
In 2017, he was hired by Exelon, BGE’s parent company, as an assistant counsel. In 2021, he was named general counsel for BGE.
As the electric company’s top legal eagle, Ralph pressed Baltimore’s acting solicitor, Ebony Thompson, to drop the 27% minority business (MBA) and 10% women’s business (WBA) goals she had proposed.
In place of tough language warning that “failure by BGE to comply with this subtitle is a material breach,” the finalized contract includes these anodyne words:
BGE agrees that it shall make every good faith effort to equitably utilize the services of MBEs and WBEs.
The final agreement also:
• transfers the power to determine which conduit projects are done from the Department of Transportation’s Conduit Division to BGE.
• eliminates the city’s local hiring law, which would require that at least 51% of hires on future conduit construction contracts be city residents.
• allows BGE greater flexibility to tear up city streets to reach underground conduits.
The contract was approved last month by Thompson, Mayor Scott and DPW Director Jason Mitchell, acting on their own as a three-member Board of Estimates.
City Comptroller Bill Henry and Council President Nick Mosby had boycotted the meeting and said the vote was invalid because a proper quorum wasn’t established.
Thompson ruled that the vote was legal, and Henry’s and Mosby’s absences were counted as abstentions. A second BOE vote is scheduled for April 5.
PIA-generated documents reveal that contract negotiations were hidden from public view by a non-disclosure agreement.
Ralph demanded secrecy from the city after Baltimore residents voted last November to ban the sale or transfer of the city’s 700 miles of underground conduits, which are rented by BGE to supply electricity to homes and businesses.
“Now that the elections have passed, I would like to resume our discussions,” Ralph emailed with “warmest regards” to City Solicitor James Shea and Hilary Ruley on November 15.
He attached a four-page NDA that specified that even “the existence of discussions” between BGE and the city law department would not be disclosed.
The NDA effectively kept other conduit users such as Comcast and Verizon – as well as the City Council and the Conduit Division – in the dark until The Brew disclosed the pending agreement on January 26.
Only a handful of people in the law department knew about the negotiations, according to emails reviewed by The Brew. (The NDA did not cover PIA requests made for draft agreements and correspondence.)
Thompson Tries to Make Changes
Thompson, who took over negotiations after Shea retired in early January, proposed the inclusion of minority and local hiring rules in the agreement.
The language, however, was dropped as Ralph urged the law department to “keep working to keep this moving” so that BGE could go before the Maryland Public Service Commission with a 5% proposed rate increase.
The conduit agreement that Ralph crafted was radically different from the one he negotiated on behalf of the city in 2o16
The agreement that Ralph crafted differed radically from the one he negotiated on behalf of the city in 2016
Rather than paying the city $28 million a year in franchise fees to rent the conduit space, BGE proposed spending a bit more – $30 million a year – in capital improvements so long as it had “sole discretion” in how the money would be spent.
A “maintenance fee” of $1.5 million a year would be forwarded to a greatly shrunken Conduit Division to handle inspections and routine repairs.
After trying to amend the agreement to give the city final say on capital investments and to incorporate MBE, WBE and local hiring rules, Thompson acquiesced to BGE’s terms.
Threat of BGE Lawsuit
Thompson now lauds the agreement as “a huge win for the city” that “enhances and strengthens Mayor Scott’s vision of equity,” she said in February 9 testimony before the City Council.
More recently, she adopted a talking point from BGE, asserting the deal will save ratepayers $50 million in potentially higher rates because BGE can now amortize conduit payments over a long time period.
The BGE agreement “enhances and strengthens Mayor Scott’s vision of equity” – Ebony Thompson.
According to Mayor Scott, passage of the agreement (by three members of the BOE) safeguards the city from future liability costs and the immediate threat of a lawsuit from BGE.
”We were on the brink of litigation,” he told Tom Hall repeatedly during a WYPR interview last Friday,
The final agreement, he asserted, “is about getting the best of both worlds” through a public-private partnership.
Asked about criticism of the deal as “completely lopsided in BGE’s favor,” Scott answered, “There’s no disagreement . . . This is about people in Baltimore City doing what’s done – spreading disinformation for reasons that are not in the best interests of taxpayers.”
Asked if BGE now is incentivized to improve conduits in neighborhoods where it stands to make the most money, Scott answered:
”We are not going to sit there and allow BGE to just ignore one part of town versus another. We’re going to work with them, as we had been doing in all the work they’ve been doing, and going into neighborhoods that are disinvested in.”
• To reach a reporter: reuttermark@ yahoo.com