Office building proprietors to appeal BG&E rate boost

January 03, 1991|By Kim Clark

The owners and managers of nearly all of the office buildings in downtown Baltimore have banded together to appeal last month's order granting Baltimore Gas & Electric Co. its largest rate increase ever.

Attorneys for the Building Owners and Managers Association said yesterday that they would file briefs in Baltimore Circuit Court Monday charging that they are bearing too much of the $149 million rate increase approved last month.

Dec. 17, the Maryland Public Service Commission allowed BG&E to increase its electricity rates by $77 million, or 4.7 percent, immediately, and an additional $72 million, or 4.4 percent, in June.

Shawn Matlock, attorney for the building owners and managers, said that if the group wins its appeal, as much as $15 million in electricity costs could be shifted from the bills of commercial buildings and offices to those of residential and industrial power users.

The 100-member group, which represents owners or managers of about 15 million square feet of office space in the Baltimore metropolitan area, says it is contributing an unfair share of BG&E profits, even though last month's percentage increase in residential power rates was greater than that for commercial rates.

The initial increase, for example, pushes residential rates up 5.7 percent and office rates 4.2 percent.

But BG&E earns a higher profit on its sales to office buildings than it does on sales to any other customers, Mr. Matlock explained. In 1989, for example, the PSC said BG&E should earn a profit of 10.01 percent on its investments, but it earned more than 11 percent from power sales to office buildings. At the same time, BG&E earned a profit of about 8 percent on power sales to Baltimore area homeowners and apartment dwellers, according to documents filed at the PSC's office.

The PSC has said that it wants to bring the profit rates for different customers closer to the target, but Mr. Matlock said his clients are tired of waiting.

"This is starting to become ridiculous," he said, charging that the PSC has picked on the building managers because they were easier targets than the nearly 1 million residential customers of the state's largest electric utility.

"There was a very large outcry. . . . They didn't want to upset

the public," he said.

People's Counsel John M. Glynn, the attorney appointed by the governor to represent consumers in regulatory matters, said yesterday that the building managers' appeal will give him a chance to challenge the PSC's decision on behalf of residential customers.

Mr. Glynn said he expects to raise questions about the PSC's decision to charge customers for about $41 million in increased repair costs for BG&E's troubled Calvert Cliffs nuclear power plant.

In addition, he said, he would like to appeal the way the PSC passed through to customers $72 million for BG&E's costs of building a new generator at the Brandon Shores plant in Anne Arundel County.

Also likely to be included in the court hearing will be BG&E's request for a bigger rate increase.

BG&E had already announced that it would ask the PSC to rehear the rate decision and consider granting an additional $20 million increase for nuclear expenses the commission had disallowed.

As a result of the office managers' appeal, however, BG&E's appeal also will have to move to the circuit court, said PSC spokesman Frank Fulton.

BG&E spokesman Arthur Slusark said yesterday that the company was still studying what effect the court filing would have on its case.

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