Utilities

Anne Arundel County might lose almost $5 million a year, or the salaries of about 120 teachers, so that Baltimore Gas and Electric Co. can get a $30 million tax cut. Calvert County could lose more than $3 million a year, enough to pay the county's police force, to afford BGE the same privilege.Baltimore County's tab for the utility giant's tax reduction would be small by comparison, maybe $1.5 million a year.Those counties and others could lose millions because, in a war as big as utility deregulation, there are many battles, each with winners and losers.

Shares of Environmental Elements Corp. jumped 25 percent on nine times their normal trading volume yesterday after the company announced a four-year contract worth more than $100 million, its largest ever.The Baltimore-based company's shares closed at $3.75, up 75 cents each. Nearly 102,000 shares changed hands, compared with a three-month daily average of 11,092."This will definitely add to earnings over the next few years," said analyst David D. Weaver, who follows the company for Legg Mason Wood Walker Inc. in Baltimore.

Two of Baltimore Gas and Electric Co.'s power plants released more than 14 million pounds of toxic chemicals into the air last year, likely making it Maryland's top polluter.The amount dwarfs the figures of the top polluters of 1997, the Westvaco paper products company in Western Maryland and Millennium Inorganics, a Baltimore chemical company.Although the power company's numbers are included in a report to be released next month by the U.S. Environmental Protection Agency in its national Toxic Release Inventory, BGE announced them yesterday, as did other utilities throughout the country.

Raising prospects for sweeping change in the way Maryland consumers pay for electricity, utilities and their business customers have reached agreement on legislation to end state regulation of the power industry in three years.House and Senate leaders said yesterday that they would introduce companion bills by the end of the week reflecting the complex compact between business and utility industries. The bills were hammered out after almost a year of closed-door talks.With neighboring states already moving to give their customers choices about where they buy their power, proponents said Maryland's economic viability is at stake as major manufacturing plants look to lower their electric bills -- or move to where costs are cheaper.

WASHINGTON -- U.S. industrial production rose in October at the fastest rate in seven months as utilities and appliance and auto manufacturers bounced back from the effects of Hurricane Floyd, Federal Reserve figures showed yesterday.Output at factories, utilities and mines increased 0.7 percent last month -- the largest gain since March -- after falling 0.1 percent in September when the hurricane disrupted power plants and many factories along the East Coast.The increase demonstrates that the economy can grow with little pressure on prices, analysts said.

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.

IT'S no surprise that the Public Service Commission's new report on utility companies' response to Hurricane Floyd focuses on inadequate customer communication and the inability to judge utility performance in restoring service.Those are two nagging questions from the September storm that left hundreds of thousands of Marylanders without electricity.Customers were often kept in the dark, figuratively as well as literally, about the expected time period for service restoration. That added to public angst and anger.

Baltimore Gas and Electric Co. and Maryland's other utility companies will seek permission today to recover billions of dollars in costs from consumers as part of a plan to revamp the state's electrical power industry.The issue of so-called "stranded costs" -- money that utilities believe they are owed from investments in generating plants and fuel -- is expected to be the thorniest hurdle to transforming Maryland's regulated, monopolistic electricity suppliers into full competitors by July 2002.

Baltimore Gas and Electric Co.'s earnings fell slightly in the third quarter despite a hotter-than-usual summer that kept area air conditioners humming.Common share earnings dropped 2.1 percent, to $161 million or $1.08 per share.The company blamed the decline largely on the settlement of contract dispute with Peco Energy Co. of Philadelphia.BGE canceled a power contract with Peco after state regulators refused to allow its cost to be passed on to consumers.BGE did not reveal details of the settlement or the extent of the impact on earnings.

Gov. Parris N. Glendening yesterday tapped Glenn F. Ivey, a lawyer who coordinated the Senate investigation into the death of deputy White House counsel Vincent W. Foster Jr., to chair the Public Service Commission.He worked on the Foster probe as counsel to the Senate Whitewater and banking committees from 1994 to 1996. Since then he has been chief counsel to Senate Minority Leader Tom Daschle of South Dakota and responsible for telecommunications issues.Ivey will replace H. Russell Frisby Jr., who resigned last month with four months of his term remaining to become president of a telecommunications trade association.

The more than 120,000 Maryland customers who are behind on their home gas and electric bills will have a chance to work out interest-free payment plans with the state's utilities to avoid service disruptions under a plan approved by state regulators. The Maryland Public Service Commission lifted its temporary ban on service terminations Friday, but it said the utilities must offer plans to give consumers a chance to pay bills. Last month, the PSC ordered utilities to temporarily halt terminations to give regulators a chance to address growing delinquencies among customers grappling with high winter utility bills amid a recession.

Utility company representatives said Tuesday that they support a proposal to offer no-interest payment plans to customers behind on their bills so long as the debts are repaid before heating bills start increasing again next winter. "When you start pancaking a payment plan on top of a very cold winter period, that's when customers get far behind," Wayne Harbaugh, Baltimore Gas and Electric's vice president for regulatory affairs, told state regulators during a hearing. The utilities want to recoup the costs of providing these plans, which Harbaugh described as "basically a no-interest loan" to customers.

The Public Service Commission just made a big bet on natural gas, overruling consumer advocates and its own staff, by ordering utilities to buy much of next winter's gas at today's cost rather than waiting for prices to possibly fall even further. Natural gas prices have plunged along with all energy costs. PSC staff, the Office of People's Counsel and Maryland utilities all wanted to buy gas as usual, filling pipes month by month between now and October and paying the spot price each time.

Anyone who still believes Maryland's surging electricity rates and deregulation debacle are somehow unique to the state ought to take note of what's been happening in Texas. Utility customers in the Lone Star State (often touted as one of the nation's most ambitiously deregulated) have seen once-cheap wholesale prices spike to many times the national average. The causes are familiar - global demand for natural gas, a congested power grid, and utilities spinning off their power plants to third parties.

WASHINGTON -- Forgotten but not gone, the waste from more than 100 nuclear reactors that the federal government was supposed to start accepting for burial 10 years ago is still at the reactor sites, at least 20 years behind schedule. But it is making itself felt in the federal budget. With court orders and settlements, the federal government has already paid the utilities $342 million. But it is virtually certain to pay a total of at least $7 billion in the next few years and probably more than $11 billion, government officials said.

Responding to customer outrage, a Western Maryland utility promised yesterday that it would refund a surcharge that was levied on 220,000 customers to pay for energy-efficient light bulbs mailed to them as part of a conservation program. Jeff Trout, attorney for Allegheny Power, defended the program in a meeting with the state Public Service Commission yesterday, but he acknowledged that its execution was flawed. Allegheny Power's shareholders will pay the full cost of the $2.5 million program, he said.

Gov. Martin O'Malley wants you to use less electricity, building on the premise that the cheapest and least-polluting kilowatt is the one never used. But the goal he set in July - getting every Marylander to cut electricity use by 15 percent in seven years - is running up against the technical and financial realities of the power industry he wants to reform. Utilities recently met his call to action with proposed conservation programs that together could cost ratepayers hundreds of millions of dollars over many years and still fall short of the goal.

Utility regulators yesterday presented lawmakers with a new model for electric regulation in Maryland, reinforcing the widespread view in Annapolis that competitive markets have failed to deliver benefits to consumers. Steven B. Larsen, chairman of the Public Service Commission, said the state could not afford to wait for the power industry to act on its own to keep the lights on. He told members of the Senate Finance Committee that it would take a series of interventions by regulators to ensure reliability of the power grid and achieve lower prices in years to come.

State utility regulators begin debate today on proposals to scrap the way Maryland utilities buy electricity in favor of a more flexible system that some argue will eliminate price shocks like the one that hit consumers this past summer. The Public Service Commission hearings are the latest phase in a multipronged review of the state's deregulation laws that consumer advocates hope will lead to lower electricity prices. Gov. Martin O'Malley and lawmakers ordered the studies in response to outrage over a more than 70 percent rate increase for customers of Baltimore Gas and Electric Co. over the past two years.

I would like to know if my shares of Wendy's International Inc. will continue to grow in my IRA. - C.M., via the Internet The nation's third-largest hamburger chain - behind McDonald's and Burger King - isn't just trying to sell more food. It could be trying to sell itself. Introduction of a breakfast menu in 650 of its more than 6,600 Wendy's restaurants, additional Frosty Float flavors, new sandwiches, the "Do What Tastes Right" ad campaign and job cuts are all moves to try to turn itself around.