BGE puts cost of system repairs from Floyd at $17.9 million

Changes in procedures prompted by complaints, governor's inquiry

Utilities

October 16, 1999|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

Baltimore Gas and Electric Co. said yesterday that the projected cost of repairing its damaged system after Hurricane Floyd would be $17.9 million, which the utility said helped decrease its third-quarter earnings by 15.4 percent from 1998.

As part of an investigation ordered by Gov. Parris N. Glendening, BGE also said it will change some of its procedures in response to complaints about its repair performance and preparedness after last month's storm.

BGE submitted a self-assessment to the Maryland Public Service Commission, which regulates the state's utilities, yesterday in the first phase of the investigation. Public hearings on the performance of BGE and the state's seven other utilities, including Bell Atlantic-Maryland Inc., are set for Nov. 4 and 5.

"We did most things extremely well, and there are some things we will work to improve," Frank O. Heintz, BGE's executive vice president of utility operations, said in a written statement.

"Regrettably, the repair work associated with such extensive damage is significant, unavoidable and very time-consuming," he said.

BGE will primarily look into ways to manage high call volumes, provide customers with restoration times specific to their neighborhoods, and reduce service interruptions caused by storms in general, Heintz said.

Glendening ordered the PSC to complete its investigation and report its findings no later than Dec. 1, said Gregory Carmean, the commission's executive director.

"It's up to the commission to identify issues and how to proceed on them," Carmean said. "The commission's authority is very broad. We have the authority over anything that affects the public interest."

At its peak, Floyd cut power to 363,000 residences and businesses in the Baltimore area, some for as long as eight days. BGE has 1.1 million electricity customers in the region.

In the week after the Sept. 16 storm, the PSC received more than 1,000 calls complaining about power outages and slow repairs.

Chief among the complaints from customers was that BGE took too long to restore their power. Critics blamed the utility's slow response to inadequate staffing.

"There are less crews, and less qualified crews, out in the field working on behalf of the consumer," said Richard P. Crawshaw, a spokesman for the International Brotherhood of Electrical Workers, which is attempting for the third time in five years to organize BGE workers. "I believe future storms will be worse."

BGE said that, while its number of overhead linemen and service operators has declined, it has cross-trained workers to serve on crews.

BGE also said that a one-time charge of $4.9 million was reflected in its third-quarter earnings.

The company's earnings in the quarter that ended Sept. 30 fell 15.4 percent compared with last year's quarter because of Floyd, two other one-time charges amounting to $24 million, and a revenue deferral of $37.5 million.

BGE reported earnings of $136.1 million, or 91 cents per share, for the third quarter, compared with $160.9 million, or $1.08 per share, posted for the comparable period a year ago.

It said revenue rose 3.9 percent in the third quarter, to $970.4 million.

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