Whether PSC can alter settlement is disputed

2 camps disagree as hearings end

Utility deregulation

August 14, 1999|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

Three days of public testimony on the proposal endorsed by the Baltimore Gas and Electric Co. to deregulate Maryland's electric industry ended yesterday, but the parties could not agree on how much leeway the Public Service Commission has in deciding the case.

The settlement, negotiated by BGE and 11 other parties in June but strongly opposed by a group of potential competitors to the company, includes a clause that voids the agreement if the five-member commission votes to change it.

But the Mid-Atlantic Power Supply Association (MAPSA), a New Jersey-based group made up of companies that may want to sell electricity in Maryland, contended during the hearings that the commission could change the settlement, which is scheduled to take effect in July, to make it more conducive to competition, without destroying it.

"We're not saying all or nothing," said MAPSA attorney Thomas W. Kinnane. "The worst-case scenario is for the settlement to be approved and there wouldn't be competition for some time.

"We believe we left room for the commission to make adjustments."

Witnesses called on behalf of the coalition suggested the PSC reduce the $528 million in "stranded costs" that the agreement says BGE would receive from all of its customers as partial repayment for what it has spent building power plants.

Witnesses also suggested raising the "shopping credit" of 4.3 cents for residential customers.

The amount charged customers on their monthly bills for the production of electricity is known as the "shopping credit."

If a competitor could supply electricity for less than that price, the customer could save money.

Robert S. Fleishman, vice president of corporate affairs and general counsel for Constellation Energy Group, BGE's parent company, said the "rate cut and all the other elements wouldn't" exist if any part of the settlement is modified.

"We would be back on the path of litigating the case," he said.

Mi- chael J. Travieso, head of the Office of the People's Counsel, which supports the settlement, says, "I don't know if we can necessarily prevent the commission from doing what is in the public interest. But the commission might think it can do whatever it wants with the settlement. In our view, it can't."

If the commission does decide to change settlement terms, the parties would have the option of appealing, Travieso said. If the commission decides to veto the settlement, "there would be at least six months of litigation, easily. At least 25 issues that were settled, wouldn't be settled.

"It would be a free-for-all," he said.

Glenn Ivey, commission chairman, would not comment on the PSC's options.

"We can't comment directly on the settlement and the hearings at this point because we are about to go into deliberations, and it wouldn't be appropriate at this time," he said.

Kinnane, the MAPSA attorney, said if the commission decides to approve the settlement, "we will do whatever we have to to enforce our rights."

Written closing arguments in the hearings are due Aug. 30, and rebuttals Sept. 8.

The commission will issue a decision in October, Ivey said.

Pub Date: 8/14/99

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