PSC rejects request by Cogen to reconsider BG&E decision

August 07, 1992|By Ross Hetrick | Ross Hetrick,Staff Writer

The Maryland Public Service Commission this week rejected a request from Cogen Technologies Inc. to reconsider its decision that Baltimore Gas and Electric Co. must open up bidding on new electric power plants to all interested companies.

Wednesday's decision involved a case in which Houston-based Cogen challenged BG&E's plans to build a power plant in Perryman, in Harford County. A PSC hearing examiner had ruled earlier that BG&E must give Cogen another chance to bid. But the commission's ruled on May 21 that bidding be opened to all non-utility companies.

With the May order the commission ended BG&E's virtual monopoly on building power plants. Under the terms of the ruling, BG&E must request bids from non-utility power companies to provide electricity to the company.

If the cost of buying electricity is less than the cost for BG&E to produce the power itself, the utility must accept the bid. BG&E has submitted proposed bid requests to the commission.

Cogen objected to that ruling, contending that it had made a legally binding offer to BG&E before the commission's decision to open the bidding.

The commission rejected that argument, saying the offer was not binding because Cogen's proposal would not have provided electricity below BG&E's cost of production.

The decision was "further confirmation that the commission is giving lip service to competition in power generation in Maryland," said Robert C. McNair, chairman and president of Cogen. "BG&E is orchestrating the whole scenario," he said, adding that he believes BG&E will make the terms for bidding so difficult that only the utility will be able to meet them.

BG&E spokesman Arthur J. Slusark, said the order showed once again that the Cogen project was not cost effective "by a wide margin" and was not in the best interest of rate payers. He also called the charge that BG&E was orchestrating the matter "ludicrous."

"The Public Service Commission is guiding the process," Mr. Slusark said. "It sounds like sour grapes to me."

On a different issue, the commission said its decision yesterday does not affect a contract between BG&E and AES Corp. of Arlington, Va., that calls for AES to build a 300-megawatt plant for BG&E after 1995.

The PSC said that because the contract for that proposed plant was signed Dec. 20, 1991, before the commission's May decision, it was not affected by that decision.

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