BG&E seeks another rate increase for Feb.

January 04, 1991|By Kim Clark

Just weeks after winning its biggest rate increase in the company's history, Baltimore Gas and Electric Co. proposed yesterday raising its power charges again next month.

BG&E filed for permission from state regulators to increase monthly electric bills for the average residential customer by $1.13 a month starting Feb. 1.

By March, customers using an average of 600 kilowatt hours a month will be paying $52.33 a month in BG&E electric bills, BG&E said.

Yesterday's filing comes on top of a two-step, $149 million increase in base rates that was approved by the Maryland Public Service Commission Dec. 17. That move pushed up monthly residential bills nearly $3 immediately and $3 more on June 1.

Yesterday's proposed 8.9 percent increase in the fuel-rate part of BG&E charges would bring BG&E an additional $4 million a month, the company said.

The proposed increase, which would run for two years, would help the utility pay for the replacement power it has purchased to fill the gap in its electricity supply created by the shutdown of its Calvert Cliffs nuclear plant.

BG&E said it asked for the rate increase because it has spent more than $300 million on replacement power and needs to recover that money.

The utility doesn't make a profit when it gets reimbursed for replacement power, said BG&E spokesman Arthur Slusark.

"BG&E feels it is reasonable to pass along increases and decreases in the actual costs to the utility," he said.

Mr. Slusark said about 80 percent of the requested rate increase resulted from the closing of the Calvert Cliffs plant and that part of the rest resulted from higher oil prices.

Before yesterday's filing, BG&E had raised its rates six times to pay for the replacement power for the troubled nuclear plant, which was shut down in the spring of 1989. The cost of the replacement power has added more than $3 a month to residential customers' average monthly bills. BG&E says it has paid about $20 million a month to replace the energy that Calvert Cliffs' generating units would have provided.

The proposed request would increase BG&E's rate per kilowatt hour for residential customers by about a fifth of a cent, to 8.71 cents. Overall, costs of replacement power account for nearly a cent of that rate. A kilowatt hour is the amount of energy needed to run ten 100-watt light bulbs for one hour.

The rate increase approved last month was the subject of lengthy hearings and public debate.

But yesterday's proposal is likely to be given quick -- but tentative -- approval, said those familiar with the case.

In the past, the Public Service Commission, which sets rates for regulated monopolies such as BG&E, has routinely approved requests for reimbursement for replacement power, said Frank Fulton, spokesman for the PSC.

Mr. Fulton said the commission might decide to delay the start of the increase to March, however.

The commission already has started an investigation of BG&E's replacement-power costs and has said in the past that it will allow BG&E to pass through about half of those costs temporarily. But the commission said it might decide next year to force the company to reimburse all of the replacement-power costs it has collected.

State law does not permit utilities to force customers to pay for costs that regulators deem to have been "imprudently" incurred.

If the PSC decides next year that managerial mistakes forced BG&E to shut down the Calvert Cliffs plant, the commission could insist that much of the money collected because of the closing be refunded to customers.

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