Electric rates on the way up again

December 18, 1990|By Frank D. Roylance | Frank D. Roylance,Evening Sun Staff

If you're a typical residential electric customer using 600 kilowatts of power each month, you can expect to pay almost $3 more on your monthly electric bill, starting in January.

And when the Baltimore Gas & Electric Co. starts running its new, coal-fired Brandon Shores 2 generator in Pasadena next summer, the utility will tack on another rate increase almost as large.

The two increases approved yesterday by the Maryland Public Service Commission total $149 million, the largest electric rate increase ever for BG&E.

"It's huge," said People's Counsel John M. Glynn, who opposed the rate increase during seven months of deliberation by the PSC. "Three dollars a month is a large increase for a relatively small user."

"Obviously, it's disappointing to see the residential rate-payer saddled with a substantial rate increase at this time," Glynn said.

BG&E officials said the money is needed to meet the rising costs of operations and maintenance, transmission line construction and improvements at the company's troubled Calvert Cliffs Nuclear Power Plant in Lusby.

"BG&E is continuing its program to meet rising expectations for safety and performance in the nuclear industry," said utility spokesman Art Slusark. Even with this increase, "BG&E rates . . . are still among the lowest on the East Coast."

As large as the increase is, BG&E did not get all it asked for. It had asked the PSC in May for $198 million more in annual revenues, an increase of 12 percent.

Yesterday's decision grants the company $77 million in rate increases effective today, a boost of 4.7 percent.

BG&E spokesman John A. Metzger said the $77 million increase will add $2.96 to the monthly bill of the typical residential consumer, who uses 600 kilowatts a month. Half the utility's residential consumers use more than that; half use less.

When Brandon Shores 2 starts generating electricity next summer, BG&E could get another $72 million in rate increases, a jump of 4.4 percent. That would cost the typical consumer about $2.75 more a month.

But the exact amount of next summer's rate increase will not be calculated until Brandon Shores 2 actually starts running. The PSC will then determine the plant's real operating costs, the savings in fuel efficiency BG&E realizes with the more modern equipment and the company's overall profit margin before finalizing the increase.

The $149 million rate increase is far and away the largest electric rate increase ever awarded to BG&E in a single year. The largest until now was a $84.8 million increase granted by the PSC in February 1982.

"Any time you add a new power plant, it is a large expense," Slusark said.

First planned in the 1970s, the Brandon Shores generators were delayed "as much as possible until . . . they absolutely had to be built to meet the tremendous growth in central Maryland in the mid and late-1980s," Slusark said.

Rapid growth has also made necessary the construction of upgraded transmission lines to serve fast-growing areas of central Maryland.

A worsening shortage of generating power, coupled with plant failures and inadequate transmission lines, have all contributed to voltage reductions and rolling blackouts during periods of extreme heat in the past two summers.

Finally, Slusark said, "we are in a new environment regarding Calvert Cliffs." The plant has saved customers $5 billion in fuel costs during its lifetime, and "now it comes time when we have to put more money into the plant."

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

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

PSC spokesman Frank Fulton said it will have cost BG&E about $142 million to operate and maintain Calvert Cliffs for the year ending next June.

Of that, the PSC ruled, about $5 million BG&E sought to recover from ratepayers in the coming year will have to be amortized and paid for over 30 years. Another $3.3 million in costs was disallowed "because proper management would have avoided these costs from occurring," the commission said.

Slusark took issue with the PSC over that part of its decision. "Most of these costs were for safety improvements identified by BG&E staff," he said, "and we feel that it's important to receive proper rate recognition from the PSC when we do identify and correct safety items."

Glynn, the people's counsel, said it was "significant" that the PSC, in its ruling, "recognized that the company was not without guilt" in its management of problems at Calvert Cliffs. "Unfortunately, having found the company to be responsible, the commission went right ahead and charged [consumers] for the bulk of the outage."

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

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