Rivals cast doubt on low BGE rate offer

Coalition attacks electricity deal proposed by company

Secret studies alleged

Md. utility overstated costs by $440 million, New Jersey group says

Power companies

July 24, 1999|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

A coalition of companies that wants to sell electricity in Maryland filed a proposal with the Public Service Commission yesterday that it says would be more favorable to competition than the plan endorsed by Baltimore Gas and Electric Co.

The Mid-Atlantic Power Supply Association of New Jersey (MAPSA) said its proposal would maintain the 6.5 percent rate cut for residential users outlined in a settlement reached by BGE and a dozen other parties last month, but would raise the "shopping credit" customers would use to buy their power.

The settlement, which was reached after months of closed-door negotiations, would allow BGE customers to pick their power supplier by next July.

A residential utility user would be granted a "shopping credit," the amount charged a customer for the production of electricity. The credit is to be equal to the projected retail market cost of electricity. If a competitor could supply electricity for less, the customer would save money.

The proposed settlement allows a shopping credit of 4.3 cents per kilowatt hour. MAPSA's proposal offers a credit of 5.7 cents per kilowatt hour.

MAPSA contends that a shopping credit of 4.3 cents would deter competition because its members might not be able to offer electricity for less than that.

"Our shopping credit is enough for a competitive supplier to provide reliable electricity, cover its costs and offer additional savings to customers," said Suzanne Daycock, the group's executive director.

In its proposal, MAPSA said BGE inaccurately arrived at the 4.3-cent figure by overstating its competitive transition costs, known as "stranded costs," by $440 million.

As part of last month's settlement, BGE would be allowed to collect $528 million from all of its customers over six years as partial repayment for what it spent on building power plants to furnish electricity to its 1.1 million customers in the region.

MAPSA's data show that "BGE is significantly underestimating the value of its generating plants," Daycock said. "That value belongs to customers."

MAPSA said BGE has kept secret from parties involved in the settlement negotiations studies estimating the value of its power plants.

Secret studies alleged

Yesterday, the PSC ruled that BGE must make that study available to MAPSA by noon Monday.

BGE has 10 power plants in Maryland, including the Calvert Cliffs nuclear generating station in the southern part of the state, and three in Pennsylvania.

People's Counsel Michael J. Travieso, the state official who represents consumers before the Public Service Commission, said he had not reviewed MAPSA's proposal and could not comment.

"I don't know how they arrived at 5.7 cents for a shopping credit," he said. "I would have to review their filing and do an analysis to see if that is an appropriate solution."

BGE officials declined to comment.

MAPSA represents power companies including DTE Edison America, Shell Energy Services Co. and Green Mountain Energy Resources, all of which said they want to offer electricity to Maryland residents.

Deadline was yesterday

Yesterday was the deadline for parties to submit written expert testimony challenging or supporting the BGE settlement.

Written replies to the testimony are due Aug. 3.

Public hearings for parties in the case are to begin Aug. 11, and the public will have a chance to comment Aug. 16.

The settlement is subject to approval by the Public Service Commission.

Pub Date: 7/24/99

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