Delmarva to buy Conowingo Power

May 26, 1994|By Ross Hetrick | Ross Hetrick,Sun Staff Writer

In an action that could cut electric costs by 13 percent for 35,000 northeastern Maryland residents, PECO Energy Co. of Philadelphia has agreed to sell its Maryland Conowingo Power Co. to Delmarva Power & Light Co., which already supplies electricity to the Eastern Shore.

Under the proposal, which must be approved by the Maryland Public Service Commission, Delmarva will pay $150 million for the distribution system that provides electricity to Cecil County and parts of Harford County. The sale does not include the Conowingo Hydro-Electric Station on the Susquehanna River, which is owned by a PECO Energy subsidiary.

The agreement also calls for Delmarva to buy at least 200 megawatts of electricity from PECO for the next 10 years, which could cost the Wilmington, Del., utility $70 million to $88 million annually.

It could take more than six months for the PSC to reach its decision, according to PSC spokesman Frank Fulton.

Since last year, Cecil County commissioners have pressed for alternatives to Conowingo's rates, which are about 15 percent higher than rates in other parts of Maryland. Conowingo, which has no generating facilities of its own, receives all its electricity from PECO.

As a result, the PSC started investigating whether other utilities, such as Delmarva and Baltimore Gas and Electric Co., could provide electricity at a lower rate. But the sale may achieve the same objective.

Rates for customers who use 500 kilowatt hours a month could drop 12.9 percent, from $56.29 to $49.02, according to Delmarva spokesman Wallace C. Judd Jr.

These savings would increase to as much as 30 percent by 1996 because of scheduled Conowingo increases in January 1995 and January 1996.

The proposed rate would be about 3 percent to 5 percent higher than the rate charged to regular Delmarva customers because of a surcharge to pay for the switch from Conowingo to Delmarva, Mr. Judd said. He said the surcharge would be in effect for several years.

The sale appears to meet some of the objectives of the Cecil County commissioners, said Edward L. Sealover, county administrator. "[The commissioners] feel pretty optimistic about what that could bring for the county," he said.

However, he said attorneys and consultants for the county want to examine all the alternatives, including a proposal made by BGE.

Coincidentally, the sale comes shortly after Delmarva lost 150 megawatts of future sales when a consortium of electric cooperatives in Northern Delaware announced that it would start buying electricity from a New Jersey utility in 1995.

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