BG&E seeks to cut electric fuel rate

February 05, 1993|By Ross Hetrick | Ross Hetrick,Staff Writer

The Baltimore Gas and Electric Co. has asked the Public Service Commission for permission to cut its electric fuel rate by 5.7 percent in a move that would reduce the average monthly residential bill by 56 cents beginning in March.

BG&E is asking for the electric fuel rate cut primarily because it is producing more of its electricity at the Calvert Cliffs Nuclear Power Plant, reducing both the amount of purchased electricity and the amount of power generated at higher-cost oil- and gas-fired plants.

The electric fuel rate, which accounts for about 25 percent of the cost of electricity, allows the utility to pass fluctuations in fuel prices directly to the customer.

The rate cut request, which normally goes into effect automatically, was the fifth fuel rate decrease in the past 14 months, cutting a total of $3.29 off the monthly bill for the typical customer, who uses 600 kilowatt hours per month.

But for BG&E customers who use natural gas, the cut was overshadowed by an increase in gas prices,which have jumped 17.1 percent in the past seven months, adding $8.70 to the average bill.

While electric fuel rates have been coming down, the purchased gas adjustment -- which passes through changes in natural gas prices -- has been going up.

The gas adjustment, which makes up more than half of a residential gas bill, has gone up 27.8 percent from July to January. The higher prices have been spurred by a combination of increased demand, a cutback in production by natural gas companies and a temporary disruption of the market by Hurricane Andrew.

Gas customers will get some relief in their February bill as the gas adjustment comes down 4.6 percent from January.

However, BG&E customers could get the biggest increase in their bill in April when the Public Service Commission decides on BG&E's request to raise base electric rates by 8.6 percent and gas rates by 1.5 percent.

If the PSC grants the entire requested increase, the average monthly residential bill would increase $8.12.

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