Contractors back bills to curb BG&E

February 25, 1994|By Joel Obermayer | Joel Obermayer,Sun Staff Writer

ANNAPOLIS -- Dozens of local heating and air-conditioning contractors packed a Senate Finance Committee hearing yesterday to support legislation to curb Baltimore Gas and Electric Co.'s expansion into new lines of business.

The hearing, on two bills that would regulate BG&E's entry into side businesses such as heating and air conditioning repair, pitted BG&E executives against contractors who say that the company is unfairly competing because its nonutility operations are indirectly subsidized by ratepayers.

"We don't care about competing against BG&E," said Michael J. Giangrandi, who owns a heating and air-conditioning service company in Baltimore. "But if they want to compete with us, they should do it like every other business in the state."

Ken Fisher, a wholesale building products distributor who said he pays more than $1,000 a month for gas and electric bills at his home and business, accused BG&E of planning to use that money to help put him out of business.

"That just isn't fair," he said.

But BG&E President Edward Crooke said that the company does not use ratepayers' money for its side businesses, and he said that the company must expand its nonutility operations because competition is increasing in its core business of providing power.

He accused proponents of the legislation of trying to "either make our costs uncompetitive or to run us out of business."

Mr. Crooke said the company would use subcontractors to do much of its heating and ventilation servicing work, expanding the market for all contractors. If the legislation passed and the company could not expand, "the consumers will suffer," he said.

As BG&E has been expanding into nonregulated areas, it has come under attack from competitors, including a group of heating and air-conditioning contractors and appliance dealers organized as the Maryland Alliance for Fair Competition.

In October, an independent study found that more than half a million dollars of ratepayers' money was used to subsidize BG&E's appliance and electronics retailing business in 1992. Two months later, BG&E announced that it would establish a separate subsidiary for its retailing and heating and cooling service businesses, but the utility's competitors in those areas were not mollified.

One of the bills introduced yesterday would give the Public Service Commission the right to review rates and other practices at BG&E's nonutility subsidiaries, much as it does for its electric and gas operations. The other bill would go further and actually prohibit BG&E from engaging in many side businesses, as well as vastly curtail its ability to support other nonutility businesses.

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