BG&E proposal for power plant rejected by PSC

March 26, 1993|By Ross Hetrick | Ross Hetrick,Staff Writer

The Public Service Commission rejected a proposal yesterday for an Arlington, Va., company to build a $450 million power plant for Baltimore Gas and Electric Co., saying the plant was too costly.

In a related order, the commission allowed BG&E to build a

smaller, 140-megawatt combustion turbine in Harford County, while ordering it to formulate a competitive bidding process by 1994 to select a company to build a future power plant. But BG&E itself will be excluded from the bidding, the commission said.

The actions cap more than a year of proceedings before the commission regarding the amount of power BG&E will need and who will supply it. While the commission has decided that more of BG&E's electricity will come from independent power producers, there is expected to be less need for it because of BG&E's successful conservation program.

BG&E signed a letter of intent with AES Corp. of Arlington in December 1991 to build a 300-megawatt plant somewhere in the northern part of Maryland by 2001. At the time of the agreement, BG&E calculated that AES could provide the power cheaper than BG&E could itself.

But using more recent information, the commission decided that the AES proposal would be too expensive. One major reason for the change was BG&E's conservation program, which has cut the rate of growth in electric demand. The program offers rebates and other incentives to residential and commercial customers to use more efficient electrical equipment.

In its other decision, the commission allowed BG&E to build a 140-megawatt combustion turbine generator at its Perryman site Harford County to provide additional power at least for the next few years. But it also instructed the utility to submit a competitive bidding plan by 1994 to select the builder of a power plant for longer-term needs.

The commission said BG&E might find during its study that it doesn't need additional plants in the 1990s and a bidding proposal will not be needed

"In our view, ratepayers should not be burdened with additional capacity costs until such time as capacity is actually needed," it said.

If there is a bidding process, BG&E will be excluded from it because of complaints by independent power producers that it would give BG&E an unfair advantage. However, PSC spokesman Frank Fulton said any later construction of power plants by BG&E "would be decided on a case-by-case basis."

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