BG&E seeks boost in fuel adjustment charge

January 04, 1991|By Ross Hetrick | Ross Hetrick,Evening Sun Staff

With problems plaguing its Calvert Cliffs nuclear power plant, the Baltimore Gas & Electric Co. is asking the Maryland Public Service Commission to raise rates to cover costs associated with the troubled facility.

Less than three weeks after receiving a $77 million base rate increase, BG&E wants the commission to raise its fuel adjustment rate to boost its annual revenues by $48 million. The rate change would increase the residential bill for a customer using 900 kilowatts by $1.69 a month.

People's Counsel John Glynn, the state official who represents rate-payers, said he will oppose the new rate request.

"Its very disturbing that these massive increases are being borne by the public," Glynn said.

The new request, filed with the commission Wednesday, would primarily meet replacement electricity costs caused by the shutdown of reactors at the Calvert Cliffs nuclear plant in Southern Maryland, which normally provides 50 percent of BG&E's power. The cost of replacement power for both reactors at the plant is an average $600,000 a day.

Unit 2 of the two-reactor plant, which has been shut down since May 1989, is expected to be in operation early this year, BG&E spokesman Arthur J. Slusark said. Unit 1 was brought into service in October, but was shut down for three weeks in December, he said.

About 20 percent of the rate increase is due to higher fuel costs, including oil prices, which shot up after Iraq invaded Kuwait Aug. 2.

The fuel adjustment rate, which makes up about 25 percent of a utility bill, allows the utility company to pass on the cost of higher fuel costs. This rate can fall if fuel costs go down or the utility no longer needs to buy higher priced replacement power.

BG&E expects the fuel adjustment rate to begin to decrease in June as the company gets more power from Calvert Cliffs and starts to use the coal-fired unit 2 at its Brandon Shores plant in Anne Arundel County, Slusark said.

On Dec. 17, the commission granted a $77 million base rate increase to BG&E. The commission also approved another $72 million increase effective in June.

Even though it stands to receive a total of $149 million in new revenues -- the most in its history -- BG&E had asked the commission to reconsider its original request for a $198 million increase.

However, that case will now go to the Baltimore Circuit Court because the Building Owners and Managers Association in Baltimore said it plans to appeal the case to the court, according to Frank Fulton, a commission spokesman. The association is contending the rate increase was unfair to owners of commercial and office buildings.

BG&E has asked that the new fuel adjustment rate take effect Feb. 1. Traditionally, the commission has passed through fuel adjustment increases and then held hearings on them to determine whether there should be refunds. However, in the last such case, the commission cut the requested increase in half.

This is the seventh fuel adjustment increase that BG&E has requested since mid-1989.

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