Part of the settlement that was designed to open the state's electricity market to competition and lower prices could turn into a "billion-dollar windfall" for BGE's parent company - one paid for by the utility's customers, the Public Service Commission said during a hearing yesterday.
But representatives for Constellation Energy Group Inc. said that scenario was unlikely to come from payments for the nuclear power plant portion of the 1999 settlement, which was agreed to by the company and state leaders. But if it did, "an agreement's an agreement," said Robert Gould, spokesman for Constellation Energy Group, which owns Baltimore Gas and Electric Co.
The PSC ordered representatives from Constellation and BGE to appear yesterday for questioning in the wake of a recent report ordered by the legislature that criticized deregulating the state's electricity industry.
Among other things, the report argues that deregulation was bad for consumers, who took on high costs for few gains. It also questions Constellation's handling of so-called "stranded cost" payments and the nuclear decommissioning fees paid by ratepayers. The stranded cost payments are to compensate the company for taking over power plants in a deregulated environment.
Constellation had sharply condemned the study, saying it is filled with errors. Still, company officials did not attend a Feb. 6 hearing alongside BGE to discuss the findings, which angered state regulators. Last week, commissioners scheduled yesterday's hearing to question Constellation.
Company executives arrived yesterday dragging handcarts loaded with documents. They answered questions for hours during the tense, but cordial event.
Commissioners were largely concerned with the amount of money ratepayers are contributing to the cost of decommissioning the Calvert Cliffs nuclear plants in Lusby that BGE transferred to Constellation as part of the 1999 settlement.
According to that agreement, BGE customers have to pay Constellation certain fees.
When the plant's licenses expire in about a quarter-century, the fee money will be used to break them down. But commissioners estimate that ratepayers may wind up overpaying through fees, interest and inflation by about $1.4 billion, according to cost calculations by Constellation. Total payments could reach $5 billion or more, according to the PSC. The amount ratepayers contribute has been capped at $520 million (in 1993 dollars).
