Baltimore Gas & Electric Co.

January 19, 1991|By Kim Clark

Double-punched by nuclear repair costs and a weakening real estate market, Baltimore Gas & Electric Co.'s profits fell by more than $14 million, or one-third of last year's level, in the last three months of 1990, the company reported yesterday.

For the year, BG&E reported its earnings fell to $213 million, down $63 million, or 23 percent, from 1989's level.

Warm weather and lower prices cut natural gas sales, leaving the total revenues for the quarter down slightly, the company said. For the year, revenues grew $155 million, or 7.7 percent, to more than $2.1 billion.

BG&E said the earnings declines resulted mostly from the burgeoning costs of repairing the company's Calvert Cliffs nuclear power plant. In addition, BG&E said, it set aside $35 million to cover costs of buying power to replace the electricity gap created by the April 1989 shutdown of Calvert Cliffs.

The Maryland Public Service Commission has given BG&E provisional permission to recover most of the approximately $350 million the company has spent on replacement power in the last 22 months. But the commission is investigating whether to force BG&E to refund customers the money.

State law requires regulators to charge stockholders, not customers, for utility costs that are deemed imprudent, and the PSC has said it expects to decide in 1992 whether the shutdown and repair costs could have been avoided by BG&E's managers.

BG&E said it took the $35 million, or 28-cent-a-share, charge in the last quarter of the year because a recent decision by the PSC indicated that three of the five panel members think some of the repair costs were a result of management failures.

The costs of the charge were offset by an accounting change that increased earnings by about $47.5 million, or 38 cents a share, the company said.

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