BGE to raise its gas rates 2.8 percent Typical bill will rise by $2 a month for residential customers

Last increase was in 1995

State rejected request of $36.6 million yearly, approved $16 million

March 01, 1998|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

State utility regulators have given Baltimore Gas and Electric Co. permission to raise natural gas rates by 2.8 percent, which the company claims it needs to fund capital improvements and expand its system. The rates take effect today.

For BGE's 560,000 residential gas customers, the Public Service Commission's action will raise typical gas rates on energy bills by $2.03 a month, the utility said. In all, BGE will collect $16 million more annually.

When it announced it would seek to raise gas rates in December, BGE requested a 5.1 increase, totaling $36.6 million, that would have raised the average residential customer's bill by $4.38 a month.

Initially, any increase approved by the commission would not have taken effect until July 1, but BGE and interveners such as the PSC staff and the state's Office of People's Counsel (OPC) settled the matter before hearings took place, expediting the approval process.

BGE said the rate hike was necessary to maintain and expand its system, which has received $158 million in upgrades since November 1995, the last year the utility was granted approval for an increase. BGE is also working to expand the system by adding roughly 16,000 customers a year, mostly from new construction.

"We would have been happier with the $36 million increase, but I don't think we're unhappy with the $16 million," said Phil Precht, a BGE natural gas executive. "Unfortunately, some capital improvements may have to be delayed because we didn't get the full amount we sought."

"I think it was a fair settlement for consumers," said Michael J. Travieso, head of the state's OPC. "We knocked $20 million off their request. And I would imagine that this would produce some period of stability for gas prices for a while."

Even with the increase, a BGE spokeswoman said, the utility maintains some of the lowest gas rates in the region. BGE's average monthly gas bill before the increase had been $65.92, said Darcel H. M. Guy, a company spokeswoman.

By comparison, the average monthly gas bill in Washington is $76.73, while in the suburbs customers average $74.20 a month.

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

In that request, BGE had initially asked for an increase of $30 million.

Pub Date: 3/01/98

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