Industry group seeks to reverse plant transfer

Organization asks judge for review of BGE move

Utilities

July 07, 2000|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

In yet another salvo in its contentious battle with the Baltimore Gas and Electric Co., the Mid-Atlantic Power Supply Association yesterday filed a petition in Circuit Court asking for judicial review of the utility's recent transfer of its power plants.

New Jersey-based MAPSA also asked the court for an expedited hearing so the transfer - which took effect July 1, the launch date for electric deregulation in the state - can be undone.

MAPSA filed the petition jointly with Shell Energy LLC, a power supplier based in Houston, which said it is interested in competing in Maryland.

Despite a court-ordered hold on deregulation in BGE's territory in Baltimore and its five surrounding counties, BGE went forward with transferring its power plants - which produce 6,200 megawatts of electricity - to two unregulated subsidiaries of its parent, Constellation Energy Group.

The transfer is at the core of Constellation's post-deregulation strategy of becoming a national power provider. The power from the plants will be sold on the wholesale market by Constellation Power Source Inc., a subsidiary that markets and trades electricity.

"We would have expected BGE to have acted more cautiously, given the current status of their restructuring order," Suzanne Daycock, MAPSA executive director, said of the utility's transfer despite the court-ordered stay.

The issue for MAPSA and Shell with the power plant transfer is that Constellation Power Source would sell the power from the plants on the wholesale market for competitive prices.

Meanwhile, the utility would collect $528 million in "stranded costs" from its 1.1 million residential, commercial and industrial customers. The utility says those costs constitute a partial repayment for the expense of building power plants.

Thomas Kinnane, an attorney representing Shell, said BGE transferred the power plants based on approval the Public Service Commission did not have the authority to give.

"The judge is going to have to try and unscramble what has been done because, as it is, [the transfer] is one more setback for the competitive marketplace," Kinnane said.

BGE said it received all necessary approvals from the commission and federal regulators, and was required by law to transfer its power plants prior to deregulation.

Robert S. Fleishman, vice president of corporate affairs and general counsel of Constellation Energy Group, said the transfer was completed by 3 p.m. last Friday, before the court issued its delay on deregulation.

"MAPSA could have filed this suit last month," Fleishman said. "It's a shame they waited so long in this process to challenge the order."

Glenn Ivey, chairman of the Public Service Commission, said the commission opposes an injunction on the transfer. "We dealt with this issue already, and we had it go forward," Ivey said. "We want to get [deregulation] back on track as quickly as possible."

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