Ruling on BG&E fuel costs not likely for months

September 21, 1990|By Kim Clark

It has taken six months and 76,132 pages of documents for state officials to realize it will likely be another six months with another 76,132 pages before they decide who should pay for the $500 million worth of electric power purchased while the Calvert Cliffs nuclear plant has been under repair.

State utility regulators said yesterday that the issues surrounding the approximately 18-month-long shutdown of Maryland's only nuclear generating station were so complex that hearings on Baltimore Gas and Electric Co.'s request forrate increases to cover replacement fuel wouldn't begin until nextyear.

And it probably will be several months after hearings start before Maryland's Public Service Commission will decide whether it is BG&E's customers or its stockholders who must pay the $600,000-a-day bill for replacement power, people involved with the case said.

Chris Cook, the attorney who is handling the consumers' case for the People's Counsel, said his office had devoted two attorneys and two expensive Los Angeles consultants to the case.

The bill of the People's Counsel's for trying the case will probably add up to almost $500,000, he said.

BG&E and the PSC have also assigned lawyers and hired consultants, said Paul Harrington, the hearing examiner who is handling the case for the state regulators.

This will probably be one of the most expensive cases ever tried by the state regulators, Mr. Harrington said. "We've never had a case like this one. . . . It will cost several hundred thousand dollars" -- all of which will be paid for by fees on customers' bills, he said.

So far, BG&E has asked the state for permission to charge ratepayers for $347 million worth of electricity that the utility had to buy because it could not generate power at Calvert Cliffs.

But John Glynn, people's counsel, said the $347 million figure did not include costs accumulated over the summer. The total bill for the purchased power will reach more than $500 million, he predicted.

Calvert Cliffs' two 825-megawatt generators normally provide almost half of BG&E's electricity, but equipment problems have kept them shut since the spring of 1989.

The state's regulators have allowed BG&E to charge ratepayers for more than $200 million of the replacement power costs -- adding more than $2 to average residential customers' monthly bills.

The rest of the power costs are coming out of BG&E's earnings, which has hurt the once blue-chip utility's stock price and investment rating.

The PSC's approval of the rate increase was only temporary, however. The commission can decide to force BG&E to refund the increases after next year's hearings -- a move that would likely delight customers while dismaying investors.

The news of the length of the fuel rate research came as BG&E was embroiled in another debate over its rates.

In a separate matter, the utility has asked the PSC to increase its rates by $194 million to cover the cost of adding conventional generators to BG&E's existing stations such as Brandon Shores and Perryman.

The proposed 12 percent "base" rate increase, which would be the biggest in the utility's history, also included $33 million for equipment and repairs at Calvert Cliffs.

BG&E's base rate plan would increase the average residential customer's monthly bill by more than $7.

But the staff of the PSC said earlier this week that BG&E should get only about half of what it has requested.

The staff researchers said BG&E should be able to charge customers its costs caused by improving Calvert Cliffs. But the PSC staff researchers objected to the increases associated with some of BG&E's new generators, arguing that customers should not be charged for them until they were finished. PSC board members are not bound by the staff's recommendations.

The office of the People's Counsel has countered that BG&E should get only a $10 million rate increase -- and that investors should bear most of the Calvert Cliffs costs as well as the other generators' costs.

The PSC's five board members are to decide the base rate case before the end of the year.

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