PSC may pull plug on BG&E load-limit Economy Service

October 28, 1990|By Kim Clark

Once every couple of weeks, Cedric Moore starts making his morning toast before he turns off his coffee maker -- and a switch in his basement plunges his house into darkness until he turns off some appliances.

The 39-year-old Baltimore firefighter says he doesn't mind the momentary blackouts, though. In return for allowing Baltimore Gas & Electric Co. to place a "load limiter" on his house, Mr. Moore gets discounted electric rates.

Though many Marylanders might be envious of the Moore family's $30-a-month power bills, especially since electricity rates are poised to rise again Jan. 1, some state officials are recommending that BG&E pull the plug on its little-known "Economy Service".

The recommendation that the state Public Service Commission order BG&E to stop accepting new Economy Service customers Jan. 1, made by the PSC staff, has sparked a debate before the regulatory panel.

On one side are some business people and state economists who argue that Economy Service doesn't really help the people who need it and isn't fair to those who don't use it.

Arguing in favor of the program to help BG&E customers keep their power bills down are consumer advocates and customers such as Mr. Moore. They say that bill-reduction programs shouldn't be eliminated now, when electricity rates are soaring and the economy appears to be worsening.

Before the PSC commissioners decide the fate of Economy Service in December, they are likely to consider why so many who need the program don't use it, and whether profit-making enterprises such as utility companies ought to address social-welfare concerns in the first place.

BG&E, which the commission staff says is the only electric utility in the state to offer such a "lifeline" program, is staying out of the regulatory battle over Economy Service.

S. Edward Hargest, the BG&E executive who started the 8-year-old program, told the commission recently that BG&E does not want to shut down Economy Service until there is an alternative.

In a recent interview, Mr. Hargest, manager of BG&E's economic research, said BG&E will begin experimenting with alternatives next year, though he would not say what they would be.

When BG&E proposed the plan, utilities around the region were embroiled in controversies over winter shutoffs for customers who hadn't paid their bills.

Over the years, utility executives and state officials developed a host of programs to help needy customers keep electricity service.

For example, the PSC required utilities to maintain service for overdue customers who need electricity for survival, as well as to develop "budget" plans to enable customers to pay a stable monthly fee even though their power consumption might vary from season to season.

And in 1982, BG&E proposed Economy Service. It would install a device that would limit a customer's draw to 25 amperes of electricity, which would prevent customers from using electric stoves and other power-hungry appliances, while allowing them

to light their homes and use low-amperage appliances.

In return, BG&E would give Economy Service customers a 15 percent discount on their per-hour electricity rates.

BG&E thought it would earn a small, though respectable, profit, Mr. Hargest said. After the PSC approved the plan, the company ......TC began promoting Economy Service heavily, he recalled.

But by 1985 the utility had found that customers didn't seem to like the load limiter and that the program was not very profitable, he said. Last year, BG&E earned a profit of less than 1 percent on its Economy Service, while other rates provided a profit of 8 percent to 10 percent.

BG&E stopped advertising Economy Service in 1985, and the number of customers has declined steadily from a peak of about 600 to 357 today.

The decline shows that the program isn't serving those who need it, said PSC staff accountant Barry Levi.

Besides, he said, Economy Service costs BG&E's 1 million regular customers a little extra money. Because BG&E makes almost no money on Economy Service, the company has to charge other customers more to make up the difference, and that isn't fair, he said.

Mr. Levi told the PSC recently that Economy Service ought to be phased out now, while the state looks for alternatives.

But other opponents hope the state won't insist on any subsidy program.

Although Economy Service was intended to help the needy, any BG&E residential customer can sign up for it. And that, the program's opponents say, opens up the possibility of abuse.

Wealthy owners of vacation homes can sign up for the service to reduce their power bills, noted John Hughes, a spokesman for the Electricity Consumers Resource Council, a Washington-based association of industrial electricity users.

If the state wants to help people who are struggling to pay their bills, it ought to upgrade agencies such as the Maryland Energy Assistance Program, he said. "It is very inefficient [to aid the needy] through the electricity rate. Other programs should be used," he said.

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