BG&E electricity rates to increase by 4.7%

December 17, 1990|By Frank D. Roylance | Frank D. Roylance,Evening Sun Staff

Electric rates will be going up again in January, but by less than half the amount the Baltimore Gas & Electric Co. had sought.

The Maryland Public Service Commission today approved a $77 million increase in BG&E's electric rate, to take effect Jan. 1.

The 4.7 percent increase is well short of the $194 million, 12 percent rate boost the company sought in its rate request last May. That request -- the largest in the company's history -- would have boosted the typical residential electric bill by $7.25 a month.

But the ruling will allow BG&E to impose another rate increase of $72 million, or 4.4 percent, when it begins to generate electric power at its new Brandon Shores 2 coal-fired power plant in Pasadena. That is now scheduled for June 1, 1991. The company was rebuffed in its request to start charging customers next month.

Commission officials would not estimate the impact of their ruling on residential electric bills, leaving that forecast for officials at BG&E. The power company said it was working on the estimate.

In a 132-page ruling, the commission rejected BG&E's efforts to pass along to consumers the full costs of renovations at its troubled Calvert Cliffs nuclear power plant.

The plant's two reactors were shut down for more than a year by malfunctions and safety concerns. One unit remains idle.

About $5 million of the $65 million the company sought to recover from ratepayers will have to be paid for by company shareholders. Another $3.3 million in costs was disallowed "because proper management would have avoided these costs from occurring," the commission said.

The PSC also declined to rule now on the utility's request to have ratepayers foot the bill for electricity it had to purchase to replace the cheap nuclear power Calvert Cliffs was unable to generate during the shutdowns.

That issue is being argued in a separate action before the PSC, which should be decided in 1991.

"We are pleased they did recognize the full amount of the Brandon Shores factor," said BG&E spokesman Art Slusark.

He further described the commission's rulings on cost recovery at Calvert Cliffs as "fair."

People's Counsel John M. Glynn, who opposed the rate increase during seven months of deliberation by the PSC, gave the commission's decision mixed reviews.

"Obviously, it's disappointing to see the residential ratepayer saddled with a substantial rate increase at this time," he said. "While I am pleased the commission rejected some of the Calvert Cliffs costs, the real battle has yet to be fought."

"It's encouraging that the commission did reject some of the costs in this case, and refused to let the company recover the costs in the interim," he said.

In other parts of its ruling, the commission:

* Adopted BG&E's proposals for continuing a process of shifting the costs of power generation more heavily onto the shoulders of residential consumers, who are thought to be paying less than their fair share relative to industrial customers. The shift will amplify the effects on next month's rate increase.

* Rejected BG&E's request to figure its costs of operations at levels reached at the end of each year. Instead, it will continue to be computed as a 12-month average, saving consumers an estimated $24 million a year.

* Rejected the company's request to impose a 10 percent surcharge on customers who use more than 500 kilowatts of electricity in summer months. The summer rates will remain flat. A discount for heavy winter uses will be phased out.

* Voted 2-1 to reduce BG&E's authorized rate of return -- its allowable profit margin -- from 10.01 percent to 9.94 percent.

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