BG&E seeks rate cut to pass along lower power costs

February 04, 1992|By Ross Hetrick

With access to cheaper power from its nuclear power plant and a new coal facility, Baltimore Gas and Electric Co. has asked the state Public Service Commission to cut electric rates by about $36 million, which could reduce a typical household's monthly bill by about 83 cents.

If approved by the commission, the rate reduction will go into effect March 1. The request follows a Jan. 1 reduction of $28 million, which cut 67 cents off a similar 600-kilowatt bill.

Both reductions involve the fuel adjustment rate -- the portion of a utility bill that allows the company to pass on higher fuel costs -- which makes up about 25 percent of a utility bill.

BG&E has been able to reduce that rate in recent months because its Calvert Cliffs nuclear power plant has been operating normally.

Also contributing to the rate decrease is the start-up of the Brandon Shores Unit 2 coal-fired generating plant last May, the company said.

From May 1989 until last summer, one or both reactors at the Calvert Cliffs plant were out of service because of various mechanical and safety problems. As a result, the fuel rate was boosted seven times to pay for the more-expensive replacement power.

The most recent increase was last February, when the rate was increased by $48 million.

A case still pending before the commission involves whether $458 million in replacement energy costs -- stemming from shutdowns of Calvert Cliffs -- will be passed on to consumers or absorbed by BG&E shareholders.

About $136 million of that amount has already been passed on to ratepayers, but it will be refunded if the commission decides in the favor of ratepayers.

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