BG&E draws ire of home contractors Group charges utility violated state regulations

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

A group representing home improvement contractors yesterday filed a complaint against the Baltimore Gas and Electric Co. with the Maryland Home Improvement Commission, accusing the utility of more than 200 violations of regulations.

The action comes as various companies, ranging from appliance stores to kitchen remodelers, are trying to restrict BG&E's expansion into businesses beyond providing electricity and gas.

"We are opposed to utilities engaging in the home improvement business," said Robert L. Mead, a spokesman for the Maryland Improvement Contractors Association, a trade group for home improvement companies. "It is inherently unfair competition."

The association is one of 20 companies and groups belonging to the Small Business Coalition For Fair Utility Practices, which filed yesterday's complaint.

The group accuses BG&E of not having the proper licenses for its sales people, technicians and 12 appliance stores to do kitchen remodeling and install such equipment as refrigerators with ice makers, dishwashers and disposals.

The group also charges that BG&E advertising runs afoul of Maryland regulations because it offers rebates and does not specify that installation costs extra.

Counting multiple violations for each time BG&E published an advertising flier, the group itemized 207 violations. If the maximum fine of $5,000 per violation was assessed, it could result in a penalty of more than $1 million.

But this would be unprecedented at the Home Improvement Commission, said Georgia Duffee, the agency's executive director. "I've never seen million-dollar penalties at the Home Improvement Commission," she said, adding that most of the fines are between $500 and $10,000.

Ms. Duffee said the commission will investigate the complaint and refer it to the state Attorney General's Office, which will decide whether to bring the case before a hearing officer.

A hearing officer would make a recommendation to the seven-person commission, which would decide the case. That decision can be appealed to the state courts, Ms. Duffee said.

The commission process could take several months, she said.

BG&E spokesman Arthur J. Slusark said that the complaint consisted of "unsubstantiated charges from our competitors -- people who would like to see us out of the business."

He said it was ironic that regulations intended to protect consumers are now being used against competition. "It was set up to protect customers from unscrupulous businesses. That certainly doesn't apply to Baltimore Gas and Electric," he said.

BG&E has sold appliance for 90 years, but in May, it moved into kitchen remodeling with the opening of a design and sales center at Eastpoint Mall in Baltimore County.

The company is also aggressively expanding its nonutility businesses, which include real estate, a fiber optics telephone network, power plant construction and nursing homes.

Competing businesses have charged that BG&E's nonutility businesses are unfairly subsidized by its utility business, a monopoly regulated by the state. BG&E has denied that.

But last April, the Public Service Commission ordered BG&E to pay for an audit of its appliance store business to see if it is subsidized by money from its utility customers.

That study, which started today, is being done by the accounting firm of Ernst & Young and is expected to be completed by Oct. 1, Mr. Slusark said.

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