Counsel to oppose BG&E rate bid BG&E, Seeking 5.5 percent boost in natural gas rates.

April 03, 1991|By Ross Hetrick | Ross Hetrick,Evening Sun Staff

The state People's Counsel has indicated that he will oppose a proposed 5.5 percent rate increase for residential users of gas supplied by the Baltimore Gas & Electric Co.

"I anticipate that we will oppose this request," People's Counsel John Glynn said yesterday. He is the state official who represents rate payers before the Public Service Commission.

Glynn, however, said he could not comment further until he had had more time to examine BG&E's request.

In announcing the proposed rate increase, BG&E said that while the price of natural gas has declined, the costs of delivering the gas and expanding the pipeline system have increased.

The proposed increase, which must be approved by the PSC, would increase the monthly gas bill for a household using 90 therms from $51.83 to $54.71, an increase of $2.88.

The rate for commercial users would increase by 0.7 percent, boosting a monthly bill for 500 therms of gas from $261.14 to $263.08.

Therms are used to measure quantities of natural gas.

The proposed increase is tied partly to the growing popularity of natural gas and BG&E's efforts to meet that demand. Since the late 1960s, the demand for natural gas had remained relatively dormant because of government controls and shortages.

But since the late 1980s, demand has increased dramatically as BG&E has expanded its system. In 1989 BG&E hooked up about 900 new gas customers, about triple the normal number. In 1990 the number of new hookups doubled to about 1,800.

"Our market research indicates that our customers like choices," Michael J. Chesser, BG&E's vice president for consumer services, said in a previous interview. "For many customers, gas is a preference. It's clean, safe, comfortable and reliable," he said.

The proposed increase for both commercial and residential customers would bring in $12.7 million in additional revenue, according to a BG&E press release.

BG&E, which filed the request yesterday, proposes that the rate increases become effective in November.

If approved, the increases would be the first in natural gas rates since 1984. For the last seven years, prices have been dropping. BG&E lowered rates by $2 million in 1987 and $3.5 million in 1989.

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