BG&E's bid to increase rates assailed People's Counsel seeks to scale back plan

September 19, 1990|By Ross Hetrick | Ross Hetrick,Evening Sun Staff

The Maryland People's Counsel, the state agency that represents residential utility customers, wants the $193 million residential rate increase requested by Baltimore Gas & Electric cut to only $10.5 million.

BG&E requested the 12 percent rate increase -- the largest in its history -- in May to pay for renovations at its troubled Calvert Cliffs nuclear power plant, construction of a new coal fired plant, and the interest payments on money the utility spent to buy power from other utilities.

In written testimony filed with the Public Service Commission yesterday, People's Counsel John M. Glynn rejected BG&E's arguments and said many of its financial problems have been self-inflicted.

"BG&E is requesting a huge increase from the commission to attempt to compensate it for the substantial increased cost which it has incurred as a result of its mismanagement at Calvert Cliffs," Glynn said yesterday. "The company is asking to be rewarded for failure and to be paid for not producing power."

A BG&E spokesman said the company has not seen the filing by the people's counsel. The spokesman said, "The amount we request is just and reasonable. The need for the increase is demonstrated in our testimony."

One of the largest parts of the rate increase -- $41.1 million -- is for increased operating and maintenance costs at the company's Calvert Cliffs nuclear power plant in Southern Maryland. The two reactors at the plant have been shut down since May 1989, except for a nine-day period in April when Unit 1 was operating.

The plant was originally shut down after leaks were discovered in Unit 2's pressurizer. Since then safety reviews have also been conducted at the plant.

Preparations are now being made to restart Unit 1, which should be operating by the latter part of next week, a BG&E spokesman said. Unit 2 is expected to be back in operation by the end of the year. However, both units have missed several projected startup dates in the past.

Noting that Calvert Cliffs has been on the Nuclear Regulatory Commission's "watch list" of troubled plants, Glynn said the increased costs have been caused by BG&E's failure to keep up with the rest of the nuclear industry and the resulting expenditure of substantial amounts needed to catch up. Glynn contends that $32 million should be cut from company's $41.1 million request for nuclear operating and maintenance increases.

Glynn argued against BG&E receiving $21 million to pay for financing its purchase of electricity from other utility companies to replace the lost power from Calvert Cliffs. He said the commission still has not decided whether the company was to blame for the nuclear power plant being shut down.

Glynn rejected the company's position that it should be paid for the construction of the Brandon Shore plant's No. 2 coal unit before it opens in late 1991. He also opposed the company's request to change the method of calculating the value of its assets, which would boost rates.

The formal hearing before the commission is scheduled to resume Oct. 3 and continue until Oct. 5, Glynn said.

To obtain public comment on the rate request, the commission will also hold sessions beginning at 7:30 p.m. at the following places:

Southampton Middle School, 1200 Moores Mill Road in Bel Air on Oct. 1; Randallstown High School, 4000 Offutt Road in Randallstown, Oct. 2; Hampstead Hill Middle School, 101 S. Ellwood Ave. in Baltimore, Oct. 4; Bowie Senior High School, 15200 Annapolis Road in Bowie, Oct. 11.

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