PSC won't regulate BGE gas subsidiary

Maryland Watch

April 13, 1996

The Maryland Public Service Commission yesterday approved Baltimore Gas and Electric Co.'s request to maintain its natural gas brokering subsidiary as an unregulated entity.

The PSC's ruling in favor of BNG Inc. represents a defeat for competitors such as Columbia Gas of Maryland Inc., Enron Capital and Trade Resources Corp., and Eastern Energy Marketing Inc. The companies had argued that BGE's subsidiary benefited from its affiliation with the $8.3 billion utility.

BGE acknowledged that it shared personnel and resources with BNG, according to PSC documents.

The ruling means that BGE, which created BNG in September 1994, must separate all costs associated with BNG from ratepayers and avoid cross-subsidization. In exchange, any profits from the operation will go to shareholders.

The PSC said that keeping BNG unregulated ensures fair competition in the marketplace.

However, the PSC did order BGE to comply with "standards of conduct" conditions in regard to BNG, including physically separating BGE and BNG offices and the elimination of shared business leads.

Pub Date: 4/13/96

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