Appeals court upholds PSC

Deregulation plan affirmed for BGE, 1.1 million customers

April 02, 2002|By Dan Thanh Dang | Dan Thanh Dang,SUN STAFF

The Court of Special Appeals upheld yesterday an electric deregulation plan that gave 1.1 million residential customers a rate reduction and granted Baltimore Gas and Electric Co. the right to collect more than half a billion dollars from its customers as partial repayment for money it spent to build power plants.

The opinion, written by Judge Peter B. Krauser, affirmed a Baltimore Circuit Court ruling that allowed BGE to continue collecting $528 million in stranded costs from customers, give residential customers a 6.5 percent rate reduction over six years and transfer its power plants to an unregulated affiliate at book value.

The Mid-Atlantic Power Supply Association had appealed the Circuit Court's ruling in the fall of 2000. In its sixth trip back to the courtroom, MAPSA argued that the Circuit Court erred in its decision and the state Public Service Commission had overstepped its authority by allowing the restructuring plan to continue while it was under appeal.

In yesterday's ruling, Krauser deferred to the PSC and cited case law that: "Because a final decision of the commission is prima facie correct, it `will not be disturbed on the basis of a factual question except upon clear and satisfactory evidence that it was unlawful and unreasonable.'

"Indeed, if reasoning minds could reasonably reach the commission's decision from the facts in the record, then the decision is based on substantial evidence, and we will not reject the conclusion," Krauser wrote.

"This court is not concerned with whether the Circuit Court applied the correct standard of review so long as we are satisfied that the agency decision is proper," the judge wrote.

MAPSA has 30 days to appeal yesterday's decision by the state's second highest court.

"We're disappointed, but we're reviewing the opinion, analyzing the various grounds that they upheld the lower court's opinion on and we're weighing our options on pursuing an additional appeal," said Thomas W. Kinnane, the attorney for MAPSA, a New Jersey trade group representing power suppliers.

"I don't think winning this case would have changed things much, but it would, perhaps, have accelerated the process of getting savings down to the consumer a little faster. It might have made it easier for competitors to get into the market."

Only 2.6 percent of the state's residential customers have switched to an alternative energy supplier, according to a report by the People's Counsel, the state agency that represents residential and noncommercial users in utility matters.

In BGE's service territory, the report said that only 14 residential customers had switched to another supplier. Two Maryland legislators proposed a bill last month that would create a task force to monitor the progress of deregulation.

Electricity deregulation went into effect Aug. 5, 2000, in the Baltimore region - a month later than in the rest of the state - after several failed attempts by MAPSA to block its start.

Deregulation legislation was passed by the General Assembly in April 1999. The PSC approved a settlement agreement with BGE six months later. Thirteen other parties also agreed to the settlement, but MAPSA, which participated in the discussions, opposed the agreement.

The trade group charged that the PSC allowed BGE to price its electricity so low that competitors couldn't match it without taking a loss.

MAPSA also accused the commission of adopting a deregulation plan drawn up by BGE instead of calculating its own figures.

Referring to a lengthy list of witnesses and testimony used by the PSC to form its decision, Krauser wrote, "We are therefore unpersuaded by appellant's argument that the commission failed to make specific findings and to provide well-articulated conclusions.

Efforts to reach officials at the PSC and BGE were unsuccessful yesterday.

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