Baltimore Gas and Electric Co. has asked a federal court to block U.S. Army plans to privatize the utility distribution systems of five military installations in the Washington area, including Fort Meade in Anne Arundel County.
In a complaint filed in U.S. District Court in Baltimore on Monday, BGE claimed that the privatization is illegal because it fails to follow state utility laws, as required by federal law and Department of Defense regulations.
The crux of the problem, BGE officials say, is that the Army issued a Request for Proposals (RFP) last summer soliciting bids from organizations that aren't licensed to handle the electric, natural gas, water and sewer systems at Fort McNair in Washington; Fort Meade in Maryland; and Fort Myer, Fort Belvoir and Fort A. P. Hill in Virginia.
BGE says that in Maryland, it is the only utility company authorized by the state Public Service Commission to provide electricity and natural gas distribution in the Fort Meade area.
"There is a high probability of irreparable harm to BGE," the complaint states. "The Army's action threatens to violate BGE's service territory and franchise rights. ..."
The company also said loss of the Fort Meade business "could subject BGE's existing customers to potential rate impacts for electric service."
BGE is seeking an injunction forbidding the Army from awarding a privatization contract for utility distribution at Fort Meade or from spending any more public money to solicit bids for the contract, unless the solicitation is amended to include BGE, before proceeding with procurement.
"By filing the lawsuit, we're seeking to put the Army's solicitation on a level playing field ... that requires the winning bidder to comply with state and local laws and regulations," said Richard A. Ransom, legal counsel for BGE.
The Army first announced its plans to privatize utility services in the Washington area in the fall of 1998 as part of a nationwide effort.
"It's really a cost-savings initiative designed to cut Department of Defense spending," said Doug Garmen, a spokesman for the U.S. Army Corps of Engineers, which is working on privatization plans at military installations in the state.
The contracts at Fort Meade alone could prove lucrative, especially since the Army plans to privatize housing for military families there around 2001, according to the lawsuit.
More than 3,000 housing units are expected to be replaced, built or renovated over the next 10 years.
BGE said it submitted comments to the Army on May 28, 1999 challenging the selection process and parts of the draft RFP, and noting the Maryland PSC's alleged jurisdiction over utilities that operate in the state.
But the Army dismissed BGE's objections, and ignored an opinion issued by the PSC earlier this year that supported BGE's position, the complaint said.
BGE and Virginia Electric and Power Co. (VEPCO), which took a similar stance to BGE's, also protested the Army's solicitation to the General Accounting Office - a congressional watchdog agency that oversees federal bids - but those protests were denied, the lawsuit says.