Potomac Electric Power Co. yesterday accused Maryland Public Service commissioner Michael D. Barnes of a conflict of interest and asked that he be disqualified from ruling on a $27 million electric rate case.

Pepco complained there is a conflict between Barnes' job as a PSC member and his plans to run for the Democratic nomination for Congress in Maryland's eighth district, part of which is served by Pepco.

Saying he has "gone out of my way" to avoid conflicts, Barnes denied the charge and said he already has asked the State Board of Ethics to rule on the issue.

Barnes was defended by a major consumer group, the Maryland Action Coalition, whose president, Judy deSarno, accused Pepco of going after Barnes because of his criticism of utility companies.

Barnes is chairman of a three-member panel of the five-person Public Service Commission that is studying Pepco's request for a 7.6 per cent increase in electric rates that would cost consumers $27,169,000 a year.

Though he has not announced his candidacy, Barnes has filed notice with state and federal election officials that he will run for Congress from a district that includes most of Montgomery County.

In motions filed with PSC yesterday, Pepco lawyers claim the two jobs are in conflict and the conflict violates state ethical standards.

Pepco asks Barnes to remove himself from the rate case and said that if he does not, he should be removed by the rest of PSC.

Barnes' candidacy, the utility said, "will involve Pepco and its rate proceeding -- perhaps inadvertently -- in a political campaign."

"Pepco believes that the primary consideration should be that the panel of commissioners assigned to hear and decide this rate case, not only be impartial in fact, but the panel be free from all suspicion of partiality."

Maryland law prohibits PSC members from participating "in any business or avocation which is incompatible with the duties of their office."

Reco contended that running for office "is incompatible with participation on a panel hearing Pepco's rate case."

The electric company also contends that PSC commissioners are quasi-judicial officers and should be subject to the state's canons of judicial ethics which require judges to resign if they run for other office.

"No matter how impartial commissioner Barnes may be," Pepco's motion said, the campaign may raise contentions "that every ruling he makes or participates in making in this rate case, is based not on the law and the evidence but upon whether it will aid his campaign."

Pepco attorneys asked for an immediate hearing on the motion to remove Barnes, noting that cross examination of company witnesses about the rate increase is set to start Jan. 17.

Barnes said he asked the state ethics board for an advisory ruling on the matter last Friday, after he learned Pepco might seek to have him disqualified from the case.

He said there is no precedent for Pepco's claim that PSC members are subject to the same rules as judges and also no recent history of PSC members seeking elective office.

"The point they raise is an important one that I have been sensitive to and concerned about," Barnes said. "I've taken a number of steps to assure that no conflicts will arise."

He said his campaign commitees have been ordered not to seek or accept funds from anyone connected in any way with his PSC job -- including companies regulated by the board, their lawyers and PSC staff members.

"That is far more than the law requires," said Barnes, whose term expires in June. The deadline for filing for the congressional race is July.

Following the suggestion of Common Cause, a public interest group, Barnes a year ago, began keeping a public list of all contacts has had about PSC business. He is the only Maryland PSC member to reveal that information, which Common Cause says can show consumers who is attempting to influence decisions.

The conflict of interest charge against Barnes is an attempt to discredit him as a friend of the consumer, utility critic deSarno said. "He asks all the tough questions and demands answers. If this was anybody else on the commission they wouldn't have done it."