BG&E to appeal, seek additional rate boost

December 20, 1990|By Kim Clark

Although the Baltimore Gas & Electric Co. received its biggest rate increase in its history on Monday, the company said yesterday it would ask state regulators to reconsider their decision and raise power rates another $24 million.

BG&E, which received permission from the Maryland Public Service Commission to raise electric rates $72 million immediately and $77 million more June 1, said it objects to the regulators' refusal to force customers to pay approximately $24 million in costs associated with the troubled Calvert Cliffs nuclear power plant.

Monday's decision will increase the average residential customer's bill about $3 a month now and another $3 in June. If the company wins its appeal, residential bills would rise an additional $1 a month.

In its 132-page ruling, the PSC denied BG&E recovery of $3.3 million in nuclear repair expenses, finding that the utility was "deficient" in its management of four problems in the shut-down plant.

The PSC is supposed to force utilities and their stockholders -- not customers -- to pay for "imprudent" costs. It said a fine imposed by the Nuclear Regulatory Commission "clearly indicates management inattention to a procedure which has safety implications for the operation of [Calvert Cliffs]. As a result, we find that the costs . . . were avoidable and therefore do not constitute proper expenses for the purpose of setting rates in this case."

In addition, the panel refused to let the company collect about $21 million for interest it has paid on the money spent to buy power to replace lost output from Calvert Cliffs.

Despite these criticisms, the three-member PSC found "no fault with the general efficiency of the management of the operations and maintenance activities" at the plant and allowed the company to charge customers for about $43 million in other increased costs for nuclear repairs.

BG&E Vice Chairman Christian H. Poindexter said yesterday that though the company won most of its request, it is worried about the precedent set by the rejection of the expenses for the four repair jobs and the replacement power.

In a case to be decided in 1992, BG&E has asked the state for permission to charge customers approximately $350 million for the replacement power it bought to fill the gap caused by the nuclear shutdown.

Though the company has not disputed many PSC rulings in the past, Mr. Poindexter said it will in this case because "the message the decision sends to us is not in the best interests of safety." The company should not be penalized for "finding something wrong and fixing it," Mr. Poindexter said.

People's Counsel John Glynn, who had argued that customers should pay little of the repair costs, said he will fight BG&E's appeal.

The company's stock and profits have sagged since the troubles at Calvert Cliffs began, and the utility's executives "might need to show they are fighting to the last man" for extra money, he said. "I doubt if it will do them any good" though, he said.

In a related matter, BG&E officials said they have again pushed back their schedule for restarting the nuclear generator that caused the 20-month Calvert Cliffs shutdown when inspectors found cracks in some equipment.

The company originally said the shutdown of Calvert Cliffs Unit 2 would last only about six months and would end in October 1989. But the company has delayed the restart seven times since then.

The company now predicts that the second unit will begin operating again "sometime in early 1991."

The other generating unit, which ran for short times this spring and this fall, is scheduled to start operating again this week.

Mr. Poindexter said the company has had to delay the start-up because it keeps finding new problems that need fixing. He said the additional maintenance was not reflective of anything profoundly wrong with the plant but "reveals that this is a 15-year-old nuclear power plant" and that the utility is being much more careful than before.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.