Calvert Cliffs row has BGE asking for more time

May 15, 1994|By Ross Hetrick | Ross Hetrick,Sun Staff Writer

For more than four years, Baltimore Gas and Electric Co. and state regulators have been battling over who will pick up the half-billion-dollar tab left over from the 1989-1991 shutdowns of Calvert Cliffs nuclear power plant.

More than 20,000 pages of testimony and exhibits have poured into the Public Service Commission (PSC), which regulates utilities in Maryland. Millions of dollars have been spent preparing arguments. Roughly 60 days have been spent taking depositions, while a dozen days of hearings have been held through the years.

Tomorrow, the two sides meet again. This time, a PSC hearing examiner is to decide just how much longer this case will last.

It is no small matter. The series of shutdowns cost BGE more than $450 million -- equivalent to $450 for each of BGE's 1 million customers -- to replace the power that Calvert Cliffs could not generate from May 1989 to May 1991. Ultimately, the PSC must decide who pays the bill -- the company or ratepayers, or a combination of both.

Now it's BGE's turn to respond to two March studies -- conducted by the Office of the People's Counsel and the Public Service Commission -- criticizing its performance. It is expected to ask tomorrow for an additional seven months on top of the four months it was previously granted.

Its response will be in the form of a rebuttal against the two positions, which concluded that BGE should pay between $194 million and $450 million.

If the delay is granted, a decision by PSC hearing examiner O. Ray Bourland III would be moved back from late next year to mid-1996.

But the Office of the People's Counsel, which represents ratepayers before the PSC, is crying foul. It says the utility should have been able to anticipate the thrust of the People's Counsel study from the 300,000 documents that it requested from the company. That study, which took four years to complete, cost about $700,000 and was paid for by taxpayers.

"That lack of anticipation is a lot of bunk," said Christopher R. Cook, assistant people's counsel. "Were they asleep when all those pages were going through their offices?"

That argument does not sit well with the utility. BGE spokesman Arthur J. Slusark said the utility company was specifically told by the People's Counsel not to anticipate its case.

"They take nearly four years, all we are talking about is 11 months," Mr. Slusark said. "Let's be reasonable."

The spirited, if protracted, case traces its origins to early May 1989. That is when BGE found leaks in the equipment that regulates water pressure in the Unit 2 reactor at Calvert Cliffs in Southern Maryland, leading to its shutdown. A few days later, Unit 1 was also shut down.

With a series of mechanical and safety problems to overcome, the plant's two reactors were closed for between 1,370 to 1,396 unit-days over the next two years, depending on which side's counting. (A unit-day equals one reactor being out of operation for one day.)

Contributing to the length of the shutdown was the fact that four months before the leak was discovered, the Nuclear Regulatory Commission put the Calvert Cliffs plant on its national "watch list" of operations needing special attention.

That designation, which was not lifted until February 1992, helped contribute to the downtime because of the additional demands the NRCplaced on BGE.

During the shutdowns, BGE paid $458 million to $550 million to buy electricity that would have been produced at the nuclear power plant.

BGE has already collected $395 million of the extra expense from ratepayers in the form of higher electric fuel rates -- the portion of an electric bill that traditionally reflects fluctuations in fuel prices, according to the Office of the People's Counsel. The remaining $155 million has not been collected, waiting for the outcome of the PSC case.

The question, however, is not what happened, but why it happened -- and mostly, how much of the blame should be heaped on BGE. The answer to that question will decide whether BGE shareholders or BGE ratepayers foot the bill.

Depending on the outcome, BGE will refund about $300 million to ratepayers -- probably through reduced rates -- or raise the fuel rate again to collect the additional money.

As might be expected, the three parties in the case -- BGE, the PSC staff and the Office of the People's Counsel -- have agreed on little.

Each hired consultants who have come to different conclusions about how much BGE should pay. There is even disagreement on how long the reactors were out of service. While BGE and the PSC staff said the outage lasted 1,370 days, the People's Counsel said it is was slightly longer at 1,396 days.

An earlier study, completed for BGE in 1991, found the company had acted reasonably during most of the outage and only 84.5 days of the shutdowns should be laid at BGE's feet.

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