Typical BG&E bill to rise $3 Increase tied to start of Brandon Shores plant.

May 23, 1991|By Frank D. Roylance | Frank D. Roylance,Evening Sun Staff

Your electric bills will be going up again next Tuesday so that the Baltimore Gas and Electric Co. can pay for a new coal-fired generating station in Anne Arundel County.

BG&E spokesman John A. Metzger said yesterday the "typical" residential consumer, who uses 600 kilowatt hours of electricity per month, will see his average monthly bill rise $2.98, or 5.5 percent, to $56.93.

Half of BG&E's residential customers use more than that each month; half use less.

The increase follows action by the Maryland Public Service Commission yesterday granting BG&E a $123.7 million rate increase, coupled with a $58 million cut in its fuel rate adjustment. That leaves the utility with a net gain from consumers of more than $65 million annually.

The new increase follows a $77 million rate increase which took effect last December, and added $2.96 to the typical residential customer's monthly bill.

Both rate increases resulted from a rate case decided by the PSC in December, following a seven-month hearing process. Together, they constitute the largest rate increase in BG&E's history.

People's Counsel John M. Glynn, whose office argued against the rate increases during the PSC proceedings, said, "The real negative aspect of this is that the public is given the impression that they are not being hit with a massive increase, when they have been. It's just been divided in two parts . . . spread over six months, which looks better."

Yesterday's action was keyed entirely to Tuesday's planned start-up of BG&E's new 640 megawatt Brandon Shores 2 generating station, situated on the southwest shore of the Patapsco River in Anne Arundel County.

The $123.7 million increase in the utility's annual base electric rates is designed to begin the company's recovery of costs for the construction, maintenance and operation of the $662 million plant.

Construction work on both Units 1 and 2 at Brandon Shores began in June 1973, but work was slowed as the growth in consumer demand for electricity slowed during the energy crises of the 1970s, and the recession of the early 1980s, Metzger said.

Unit 1 was finally brought on line in 1984, but work on Unit 2 continued to be slowed "to conform with . . . slower growth in electric usage," he said.

Since the mid-1980s, however, the demand for electricity in the BG&E service area has been growing faster than the utility has added generating capacity. The result has been an increasing ++ number of summertime "brown-outs" as demand has outstripped the company's ability to generate or purchase electric power. That has prompted the utility to complete Unit 2 at Brandon Shores.

When Unit 2 goes on line Tuesday, BG&E is expected to realize considerable savings through reduced purchases of electricity from other utilities during periods of heavy demand, and reduced use of its own, less-efficient generators.

Those expected savings are the reason why the PSC ordered the $58 million reduction in the fuel rate adjustment charges on consumers' electric bills.

The savings are actually $6 million higher than had been projected from evidence presented back in December, said Frank Fulton, a PSC spokesman. The $123.7 million rate increase is 1 percent smaller.

The PSC delayed its calculation of the rate changes approved in principle last December so that they would reflect the company's actual costs at the time the new plant was switched on.

Glynn, the People's Counsel, objected to the summary nature of yesterday's action by the PSC, which came at a five-minute administrative hearing.

"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 accompanying $58 million reduction in the fuel cost adjustment.)

The Office of the People's Counsel wanted public hearings, a full review of the company's rates and more time to scrutinize any changes in the company's financial position since the preliminary decision in December.

"It's being done without any significant public review at all," Glynn said. "That's a very bad precedent. The utility would love to get a large sum of money at administrative meetings, if it could. That's a lot of money."

Metzger, the BG&E spokesman, said the economics of the company's rate request, which was decided by the PSC last December, "haven't changed to any degree to cause us to over-earn our [allowed] rate of return."

Lilo K. Schifter, a member of the PSC, said the commission determined last December, after hearing evidence from all sides, how the increase for Brandon Shores would be calculated. "But the increase was deferred" until May, she said.

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