Calling a Potomac Electric Power Co. construction program "unnecessary, imprudent and wasteful," the District of Columbia People's Counsel yesterday asked the Public Service Commission to pull all construction issues out of its evaluation of a proposed $48 million Pepco rate increase.
Between $10 million and $15 million of the rate increase relates to the construction program, which People's Counsel Brian Lederer called an "albatross around the neck of District ratepayers."
"At issue in this proceeding," Lederer wrote, "is whether Chalk Point Unit No. 4, a 600-megawatt oil-fired generating unit which People's Counsel has contended will be a very large and very expensive white elephant, should be included in the rate base and whether Pepco should receive accelerated depreciaton" on the Benning and Buzzard Point units.
Lederer, who called the Chalk Point facility a "rathole" in his document, maintained that the commission has failed to examine the construction issue as an important facet of the rate increase proposal.
"District ratepayers may not only be damaged in the future, but will be overcharged now if present construction plans are sanctioned in this rate case," he wrote.
The Chalk Point plant is under construction, he wrote, "despite the vulnerable oil supply situation, skyrocketing oil prices and urgent national policy against oil-burning electric plants."
Lederer, whose office is challenging several issues in the proposed rate hike, said that if the commission rules favorably on the Pepco request, customers will immediately face what could be $15 million in higher rates.
Further, Lederer charged that the commission has ignored "mounting evidence of the unreasonableness of Pepco's plan, frustrated full record development of the problems with the plan, and excluded relevant testimony and evidence."
By delaying the construction program, Lederer argued, Pepco will have a better idea of the availability of oil supplies for use at Chalk Point.
If the commission decided to split the issues and develop a full record on the utility's construction program, part of the rate increase could be granted, as long as interested parties, like the People's Counsel, are given a subsequent chance to argue the merits of the Pepco construction program.
Pepco is planning a 10-year, $1.8 billion construction program. According to a study prepared by the People's Counsel the utility could save as much $160 million by redesigning these plans.