DOVER -- Delaware lawmakers were not showered with gifts and big campaign donations from lobbyists when the pressure was applied in the late 1990s to deregulate the state's electric utilities.

The lobbying that won near-unanimous passage of deregulation was dominated by a powerhouse coalition led by Delmarva Power & Light and big electric users like DuPont who later benefited from the ability to buy cheaper power in an open market.

Sen. George H. Bunting Jr., D-Bethany Beach, who cast the lone vote against the bill in 1999, said the one-on-one lobbying was unlike anything he'd seen before.

The Alliance for Fair Electric Competition Today advertised heavily and applied pressure in Legislative Hall using some of the nation's top executives.

"There were all kinds of businessmen down there in their smartest suits waiting, like anyone else, for the chance to go back and talk to their legislators about this bill," said Bunting, whose Senate office door opens into the common waiting room.

"In Delaware, you know, those guys are almost like sports stars, and they were coming up or down to little Dover to talk to their legislators about how important this was," he said.

That star power overwhelmed opposition from the state's public advocate, Patricia Stowell, and the late Robert J. McMahon, the chairman of the Public Service Commission. Both warned that small power users might never see the lower rates that deregulation proponents touted.

As it turned out, competition has not developed for small consumers. Delaware homeowners now face a May 1 increase of 59 percent as electric rates frozen in 1999 rise to the level of the free market created by deregulation.

The General Assembly returns Tuesday after a six-week break with a slew of proposals on the drawing boards to address the big increase, including possible phasing of the increase and re-regulation of electricity sales.

"On most bills, I'd get a call from someone in my district saying: 'Dallas, I've got a problem with this bill,' " said former state senator Dallas Winslow of Hockessin. "But that didn't happen on deregulation. All the constituent calls I got were in support of it."

• Delmarva Power & Light, just merging with Atlantic Electric to form Conectiv, would be free of regulation and able to expand into telephone and cable television services.

• Large industrial users would get lower rates by seeking multiple bids for electric supplies. DuPont estimated it would save $4 million in Delaware yearly.

• Homeowners gained in the deal struck to pass the bill with an immediate 7.5 percent rate reduction and a freeze until 2003. That was later extended to 2006 by the Public Service Commission.

"He was really worried that there wouldn't be competition and that people would catch it in the neck when the caps came off," Bunting said. "Everybody knew the big boys would be OK, but Bob was worried about what might happen to everyone else."

Stowell, now retired, said last week that once a deal was struck, she was muzzled by her boss, Vincent Meconi, then secretary of the old Department of Administrative Services.

She said Meconi told her the administration had signed off on the bill and she needed to get on board. Meconi, now secretary of the Department of Health and Social Services, declined comment.

The idea was studied by the Public Service Commission as part of its consideration of the merger that would form Conectiv, and the state House had a standing Telecommunications & Electric Utility Deregulation Committee, chaired by Rep. Roger Roy, R-Limestone Hills, a sponsor of the deregulation bill.

Deregulation was driven in part by sensitivity to any outside threat to the state's competitive position. Enamored by the success of telephone deregulation, the country was rushing to deregulate electricity even though it had not been fully tested.

More than 15 states, including Pennsylvania and New Jersey, had deregulated by 1999. Maryland did so within days of Delaware's vote. Ultimately, 24 states passed electric deregulation bills before 2000, when California's rolling blackouts and price spikes burst the balloon.

"This is an issue that people are looking back at now with better than 20-20 hindsight," said Jeff Bullock, who served as Carper's chief of staff. "In 1999, the Enron and WorldCom scandals hadn't happened yet. California hadn't happened yet. Most people thought deregulation and free-market competition would be good for consumers. ... We were trying to be out there on the cutting edge."

The bill first surfaced in the House in June 1998 and was quickly passed. But it stalled in the Senate when President Pro Term Thomas Sharp said it was too late in the session to consider such a momentous change.

Sharp, Carper and others worried the bill did not adequately protect small users. Stowell called the bill "the worst piece of legislation on deregulation of electricity in this country."

After the bill stalled, Conectiv's political action committee -- organized by employees, not the company -- boosted the amount it contributed to Delaware legislators in the run-up to the 1998 General Assembly elections to more than $17,000, up by more than $6,000 from its norm.

"We gave out more money that year because deregulation was going to have a big effect on our business and therefore was a very important issue to us," said Tim Brown, a spokesman for Delmarva Power, Conectiv's successor company after a 2003 merger with Pepco Holdings.

But the utility's extra spending did not reach the limits of Delaware's contributions laws, 1998 records show. Most of Conectiv's contributions were in the $100 to $250 range. None of the 52 candidates -- mostly incumbents -- who got donations that year received the maximum of $600.

What lobbyists spent in gifts to legislators in 1998 and 1999 is not known, because filings they must make to the state's Public Integrity Commission are kept for only five years and then destroyed under state law.

Filings of gifts received by lawmakers still in office today do exist and show little evidence of a lobbyist push. The Delaware State Chamber of Commerce paid for several legislators to attend an annual policy retreat in Williamsburg, Va., at more than $1,700 apiece.

At the time, A. Richard Heffron was the chamber's chief Dover lobbyist, a position he still holds. He said the chamber's primary focuses at the time were tax cuts, education policy and workers' compensation reform.

"[Deregulation] wasn't a top priority for us, although if asked, we probably wrote letters in support," he said. "We generally support efforts to introduce the free market and competition because we think it benefits the economy."

"If it came up, it was in side discussions. It wasn't a topic on the agenda," he said. "Those were more focused on general tax and budget policy."

John Burris, then the chamber's executive director, said he doesn't recall electric deregulation being talked about with much interest. He said he didn't recall any extraordinary lobbying efforts on the chamber's part.

The heavy lifting was done by AFECT with heavy advertising in the spring of 1998 when the bill died in the Senate, and in early 1999 before it passed.

Led initially by Conectiv and big power users such as DuPont, General Motors and Chrysler, the alliance grew to 33 groups, including labor unions and social service groups administering low-income energy assistance programs for the poor.

The AFECT advertising was bolstered by other television and radio spots that consumers were hearing from stations in Philadelphia, where electric competitors were pitching for customers to switch providers.

"When you heard that something like 11 percent of the users in Pennsylvania were switching after they approved deregulation, that made it easier to vote yes," said Sen. David McBride, D-Hawks Nest. "Because you thought: Why wouldn't it work 20 miles away from Philly, too?"

When negotiations began after the General Assembly adjourned in 1998, Bullock said, most of the calls the administration received were from big businesses that claimed Delaware's competitive position might be undercut if the state didn't act while others all around it did.

"We were concerned about deregulation from a competitive standpoint," Bullock said. "We thought the '99 bill addressed our concerns for consumers, with the rollback and some technical changes we worked in."

The decision to roll back rates by 7.5 percent was included because the PSC said rates were probably too high already, and a cushion was needed during the shift to competition.

"Did we spend money on dinners? Yes. Did we spend money on entertainment? Yes. Did we bring some CEOs down to help make the case? Yes. Those are some of the tools you use in our business. But was this a rushed job? No," Byrd said.

Joseph P. Farley Sr., Conectiv's and later Delmarva Power's manager of government affairs, said the process was open and consensus was key because any of the groups in the AFECT alliance could have killed the bill if they felt it was unfair.

"Getting to the bill was a very long, very open and very complicated process. We had to be inclusive to make sure everyone was on board because any of the players could have killed it easily," he said. "There were a lot of public meetings and hearings about it."

"Electricity was different from telecommunications," Stowell said. "In telecommunications, there were technological developments that were driving the cost of service down. You didn't have that in electricity. ... But I don't think the people in the General Assembly understood that."

The Senate approved the bill 20-1. The House passed it 35-0, with five members absent and one abstaining because his law firm helped lobby for the bill.

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