The uncertainty of Iranian oil production has forced a 10 to 20 percent increase in oil costs to the Potomac Electric Power Co., much of which the company will be able to pass on automatically to its customers over the next several months.
The immediate impact on the average Washington-area consumer could be an additional fuel adjustment charge of $1.50 a month on a $30 electricity bill. Pepco officials were unable to give a precise figure because of differences in fuel adjustment clauses in the District of Columbia, Virginia and Maryland.
Pepco Chairman W. Reid Thompson, who disclosed the sharp increase in oil costs, predicted here today that the cost of low-sulphur oil "may be going even higher" in the weeks and months ahead.
In an interview with The Washington Post, Thompson said that, in an effort to hold down costs, his company may seek an easing of federal environmental restrictions to permit Pepco to burn higher-sulphur (and cheaper) fuels temporarily.
Such a plan, however, probably would need the approval of federal and local environmental agencies.
Pepco supplies electricity to 477,000 customers in the District of Columbia, suburban Maryland and parts of suburban Virginia.
Thompson was in New York to make a presentation on behalf of the electric utility industry to security analysts. He is chairman of the industry trade group, the Edison Electric Institute.
Although Pepco users will face higher utility bills as a result of the breakdown in Inranian oil production, customers in other East Coast cities, especially in the New York area, will find much stiffer increases in their monthly charges.
Utilities such as Consolidated Edison in New York and the Long Island Lighting Co. are forced by environmental restrictions to use low-sulpher-oil as their primary fuel.
Last year, Pepco generated 64 percent of its electricity by coal-powered generators and 36 percent using oilfired boilers. During the last three months of 1978, 76 percent of the fuel Pepco used was coal, 24 percent was oil.
However, because utilities such as Pepco rely on oil-burning generators to supply the electricity demanded during peak periods of use, they use more oil when demand is high.
Because of the severe cold weather in recent weeks, demand for electricity has been high -- both because elecric heaters are used more and because pumps and blowers used in oil and gas heating systems require more electricity.
William McCollam Jr., president of the Edison Electric Institute, said that nationwide demand for electriciy jumped 9 percent two weeks ago and an additional 9 percent last week.
So far, he said, despite big increases in the cost of the low sulphur oil of which Iran was a major supplier -- here have been no "problems of oil availability."
That could change by spring, government officials have warned, unless Iran resumes significant oil production. While Iran produces about 5 percent of the oil used in the United States, it supplies about 10 to 11 percent of the oil used worldwide.
Because of agreements worked out among major industrial countries after he 1973-74 Arab oil embargo, the United States might have to share some of its oil with other countries.
Just when, or if, those oil sharing agreements would be triggered is not clear.
Iranian officials now say that striking oil workers are returning to the oil fields, but it will be several weeks before significant production can resume and several more weeks before new shipments can reach ports in Europe, Japan and the United States.
It is also unclear whether the new Iranian government will produce as much oil (6 million barrels a day) as the country produced under the shah.
Pepco officials said in Washington that the price of the lowest sulphur oil that the company burns rose 27 percent between October and early February and by 8.5 percent in January alone.
The cost of oil that contains slightly more sulphur has increased 7.5 percent since October and 3.2 percent in January.
About 45 percent of Pepco's fuel bill last year was for oil, with the rest coal. Low-sulphur oil (one percent) accounted for about 30 percent of the oil Pepco burned, while oil that has a 2 percent sulphur content made up the rest of Pepco's oil purchases.