Potomac Electric Power Company cancelled construction of a $930 million power plant in Montgomery County yesterday and said it won't need to build any more generators for the next decade because its customers have learned to conserve electricity.
Pepco Chairman W. Redi Thompson said the decision will save local utility customers $500 million in the next 10 years and "will reduce our rate increase requirements in the years ahead."
Thompson said Pepco customers have set energy-conservation records in the past five years, making construction of costly new power plants unnecessary.
In the last half of 1979, he said, the electric company's customers used 2 percent less power than in the same period a year earlier. Use of electricity is expected to grow less than 1 percent a year in the decade ahead, he added.
The facility cancelled yesterday was a coal-burning power plant at Dickerson on the Potomac River north of Washington, where Pepco already had three generators.
Pepco already had started construction work on Dickerson Unit 4 and had ordered much of the equipment. Less than $90 million has been spent on the project, company officials said, and much of that will be recovered by selling the equipment.
District of Columbia People's Counsel Rian Lederer has contended for almost two years that the Dickerson plant is not needed. "If you're facing a situation where you can't build a plant without increasing the rates, then you've got to scrap it," he said.
Lederer criticized the timing of the announcement, noting the decision was made only three days after the deadline for the D.C. Public Service Commission to reconsider its recent decision to grant Pepco at $35.4 million rate increase.
The PSC probably wouldn't have raised electric bills so much if it had known the company didn't need money to build the Dickerson plant, Lederer complained.
He said, however, that it was smarter -- and cheaper for customers -- for Pepco to cancel the plant entirely rather than to simply delay its construction for several years.
Virginia Electric & Power Co. recently dicided to delay for two years construction of a huge hydroelectric facility in Bay County, Va. Vepco said stalling the project would save $170 million over the next two years, but the delay ultimately would add $400 million to the cost.
Both local utilities have seen growth in demand for their electricity dwindle since the original Arab oil embargo in 1974. Pepco originally planned to spend $1.8 billion on new power plants between 1975 and 1979 but slashed that budget by more than $1 billion by cancelling or deferring projects.
The last new Pepco power plant planned for the next decade is an oil-burning generator at Chalk Point, Md., that will be completed in 1982.
Pepco Chairman Thompson said the success of the company's "no-new-generating-plants-for-a-decade" program will depend on customers continuing to cut their use of power.