When the engineers at Potamac Electric Power Co. sat down a decade ago to plan for the Washington area's electricity needs for the 1970s and 1980s, they were under intense pressure from government regulators.
"Even under the best conditions, Pepco's generating capacity is now barely adequate to meet peak demands on its system," the District of Columbia Public Service Commission warned the power company in January 1970. "That situation can only be overcome by an aggressive program of construction and improvement to meet growing demands."
With that mandates and a forecast from the Pennsylvania -- New Jersey -- Maryland Interconnection power pool that electricity consumption would increase at least 10 percent a year, Pepco drew up a plan to build 10 power plants in the next 10 years and to increase its generating capacity by 7,100 megawatts by 1981.
It never happened. During a decade of oil boycotts, energy crisises and cost consciousness, Pepco has scrapped almost 85 percent of its construction program. By 1981, Pepco will have added only 1,100 megawatts of power output compared with the planned 7,100, and that may prove to be more than its customers can use.
For reasons that are mostly beyond the control of utility companies, demand for electric power is continuing to fall, creating new problems for the power company and the customers who pay electric bills.
Pepco recently scaled down its forecast of peak-demand growth to 2.2 percent a year, leading District of Columbia People's Counsel Brian Lederer to complain that the company still is building new power plants faster than needed.
Baltimore Gas & Electric Co. cut its projection again last week and now is planning on increasing capacity by 3.6 percent a year through the 1980s. At the rate, BG&E said it will have no need for the $1 billion coalburning power plant that it planned to build in Montgomery County in partnership with Pepco.
Virginia Electric & Power Co., which had been counting on growth of 4 percent a year, is revising its projections right now. Last week Vepco offered to sell part of a mammouth hydroelectric plant it is building in southern Virginia to two other companies because it won't need all the power the plant can produce.
Nationally the growth rate in electric use has fallen from 5.3 percent to 4.8 percent a year in the latest forecast put out by the Edison Electric Institute, the utility industry trade association.The utility growth rates are based in increases in demand at peak times -- the hottest day of the summer in Washington.
As the growth rate of electrical consumption has slowed, the industry's reserve margin -- generating capacity beyond what is needed to meet current use -- has climbed from about 20 percent to more than 30 percent, EEI officials say.
That is more reserve capacity than is needed to protect against power failures, and this excess costs customers money, contend industry critics such as Lederer, whose job as D.C. People's Counsel is to represent the public interest in utility matters.
In a report to the D.C. PSC last week, Lederer contended that Pepco, which plans to spend $520 million on new plants in the next three years, should be cutting its construction budget. "A mere $20 million reduction per year will save, in present dollars, $129 million in rates to all Pepco customers," Lederer noted.
Pepco corporate affairs directer David Boyce said the company already has cut its construction plan by more than $1 billion -- from $1.8 billion to $730 million. Pepco deferred indefinately a pair of nuclear power plants it planned to build at Douglas Point, Md., delayed several smaller projects and dropped some entirely.
Boyce said Pepco officials don't yet know how their construction plans will be affected by the decision of BG&E to drop out of the joint effort to build a major power plant at Dickerson on the Potomac River.
When Pepco drew up its construction plan for the decade, the Dickerson plant was scheduled to be in operation by 1976. Although preliminary work is under way, construction still hasn't started, and the current completion date is 1987.
Pepco contends that the cutbacks and delays in construction of new plants have saved customers money. When the company dropped plans for its two nuclear plants, it already had contracted to buy the uranium fuel to run them. Because uranium prices had jumped, Pepco was able to sell the uranium at a $40 million profit that was paid back to customers in lower bills. u
A similiar decision by Vepco, however, cost customers money. The Virginia utility already had spent $167 million on two nuclear plants before it decided they no longer would be needed. The virginia State Corporation Commission nevertheless allowed the investment to be charged to Vepco customers.
Vepco spokesman August Wallmeyer said the company does not yet know the financial impact of selling part of its Bath County, Va., hydroelectric project.
Vepco is trying to sell part of the project to American Electric Power and Allegheny Power System, two West Virginia utilities. If the company is lucky it may be able to sell shares in the project at a profit; if not, Vepco customers could wind up paying for a $1 billion projet that is rarely used.
Like many other utility construction projects that now face cancellation or delays, the Bath County project was planned before the energy crisis.
Throughout the 1950s and 1960s, the biggest problem that utilities faced was building new generators fast enough. Vepco and Pepco were among the fastest-growing utilities in the country then.
The problems began when the Arabs cut off the oil; in 1974, electrical demand fell for the first time ever.Electric use rebounded, but the utility business has never been the same.
The Washington area utility companies have seen some of the sharpest cuts in use in the country as the thermostats have been turned back in federal facilities.