Electric bills to rise by 3.7 percent Higher rate takes effect Tuesday, will cover cost of new generating station.

May 22, 1991|By Frank D. Roylance | Frank D. Roylance,Evening Sun Staff

In a five-minute administrative hearing today, the Maryland Public Service Commission granted the Baltimore Gas and Electric Co. a $123.7 million increase in its electric rates.

At the same time, the PSC ordered a $58 million reduction in the company's fuel cost adjustment rate, leaving consumers to pay a net increase of almost $66 million, or 3.7 percent. Both actions had received preliminary approval by the PSC last December, as part of a rate decision totaling $149 million. That decision followed a seven-month hearing process.

They are tied entirely to the start-up of the new 640-megawatt Brandon Shores 2 generating station in Anne Arundel County. The new rates take effect Tuesday, when the coal-fired plant is to begin producing power.

The typical residential customer, using 600 kilowatt hours of electricity, will see a $2.98 increase in his average monthly bill, company officials said.

BG&E asked for the higher rates a year ago, to recover the costs of building, maintaining and operating the $662 million Brandon Shores 2 plant.

The $58 million cut in the fuel cost adjustment reflects the savings the company expects to realize each year after Brandon Shores 2 comes on line. The new plant should reduce the amount of electricity BG&E must purchase from other utilities to meet growing consumer demand and the amount it generates at less-efficient generating stations of its own.

People's Counsel John M. Glynn, whose office has opposed the increase since it was requested in May 1990, objected to the summary nature of today's approval.

"It's particularly inappropriate since it's the largest increase ever granted to the company, and it was granted in the shortest period of time," he said.

(The $123.7 million rate increase is only the largest ever granted BG&E if it is considered separately from the $58 million reduction in the fuel cost adjustment.)

The Office of the People's Counsel, which represents consumers in rate proceedings, wanted more time to scrutinize any changes in the company's financial position since the preliminary decision in December.

BG&E spokesman John A. Metzger said economics of the increase request "haven't changed to any degree to cause us to over-earn our [allowed] rate of return."

Deputy People's Counsel Paul S. Buckley said his office will appeal the summary judgment, adding the appeal to one filed in city Circuit Court in response to the rate increase decision last December.

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