BGE says rates aren't out of line Utility challenges watchdog's contention


September 29, 1998|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Baltimore Gas and Electric Co. said yesterday that a future rate freeze could be jeopardized if regulators agree with a state watchdog that electricity rates should be slashed now by $110 million a year.

The utility, in a filing late yesterday with the state's Public Service Commission, challenged a contention by the Office of People's Counsel that BGE had overcharged customers, and intimated that any rate reduction now could adversely affect pending industry restructuring in Maryland.

"We don't believe we are overcharging customers," said Bob Fleishman, BGE's general counsel, reiterating a statement the company made earlier this month at the time of the People's Counsel's filing. "What the People's Counsel did was to take a snapshot in time. But when you look at the big picture, you can see we're not overcharging."

Fleishman added that a $110 million revenue cut could have serious consequences for the electric industry's transformation in Maryland, scheduled for July 2002.

"What we're saying is, either don't act now on the OPC's petition or look at it in the context of our electric restructuring plan filed with the commission," Fleishman said. "Our plan is contingent upon freezing rates. This would require significant changes to the plan."

The OPC contends that, for the 12 months that ended June 30, BGE overcharged customers because its capital investments decreased, expenses were cut and it claimed depreciation that was not allowed on some assets.

"The company's own reports show that they were substantially overcharging, said Michael J. Travieso, head of the Office of People's Counsel. "We stand by our position that the filing was appropriate, timely and necessary."

Pub Date: 9/29/98

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