BGE seeks gas rate increase Average residential bill would rise $4.38 a month

80 workers laid off


December 02, 1997|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Baltimore Gas and Electric Co. asked state regulators yesterday to approve a $36.6 million natural gas rate increase, which the utility contends is necessary to maintain its system and expand service.

If approved by the state's Public Service Commission, the rate boost would raise natural gas prices 5.1 percent, and increase the average residential consumer's bill by $4.38 per month.

The natural gas rate increase request came as BGE laid off 80 fossil energy and customer service employees, citing increased efficiency and a need to remain competitive.

BGE last laid off employees in February 1994, when 1,200 workers left the company.

In all, BGE and its subsidiaries now have 7,800 employees.

"These were necessary steps to maintain our position as a low-cost provider of energy," said Arthur J. Slusark, a BGE spokesman.

But critics of the company contend that BGE can't afford to lay off customer service workers and remain competitive at the same time.

"Some of the people they're laying off are really experienced people," said James Hunter, president of the International Brotherhood of Electrical Workers Local 1900, the labor union that represents Potomac Electric Power Co. employees and is fighting BGE's proposed merger in court.

"History shows that when you lay off qualified people, you have problems," Hunter said. "There's no way this can't affect their customer service."

BGE and Pepco also moved yesterday to expedite their proposed $3 billion merger into Constellation Energy Corp., filing a motion with the state Court of Special Appeals to dismiss a court challenge to the alliance filed last month by the IBEW.

At the same time, the utilities asked the state's highest court, the Court of Appeals, to take the case from the lower court. The Court of Appeals often assumes cases from the Court of Special Appeals.

Delaying tactic perceived

BGE and Pepco contend that the IBEW's Court of Special Appeals challenge is "another in a long series of attempts by the IBEW to delay final approval in the hope that further delay will VTC ultimately terminate the merger."

If granted, BGE's rate request would raise prices for 560,000 natural gas customers on July 1, 1998.

"The increase is needed to fund operating and capital improvements made to the existing gas system, as well as to help recoup costs associated with system expansion," said Frank O. Heintz, vice president of BGE's gas division.

The proposed increase would raise BGE's rate of return for natural gas from 7.15 percent as of Sept. 30 to 9.36 percent. BGE is authorized by the PSC to obtain a 9.04 percent rate of return for its natural gas operations, according to documents filed by the company with the commission.

16,000 more customers

BGE, which says it has invested $158 million since 1995 to expand and improve its natural gas system, hopes to expand its gas business by 16,000 customers annually.

BGE's last natural gas rate increase occurred in November 1995, when the PSC granted the utility a $17 million increase that raised residential bills an average $3.38 per month.

BGE had sought a $30 million increase.

Pub Date: 12/02/97

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