District of Columbia consumers could save as much a $1.6 billion if Potomac Electric Power Company's newest power plant switched from burning oil to coal, a D.C. Public Service Commission hearing officer has concluded.
But the Public Service Commission may not have the power to order the change, hearing officer D. Biard MacGuineas decided after an 18-month investigation of Pepco's power plant construction program.
MacGuineas' report, to be acted on by the PSC in the next few days, reopens a five-year debate over Pepco's decision to burn oil in the Chalk Point 4 power plant near Benedict, Md.
Scheduled to go into service later this year, Chalk Point 4 was started before the 1973 Arab oil embargo and may be the last big oil burning power plant built in the United States.
Pepco officials yesterday challenged MacGuineas' conclusion about the economics of switching from oil to coal and said they will present their own analysis of the technical and legal issues this winter.
D.C. People's Counsel Brian Lederer, however, said the hearing officer's report did not go far enough and urged the PSC to immediately order Pepco to begin converting the chalk point plant to burn coal.
"Pepco's own figures show it costs two to two-and-a-half times as much to generate electricity with oil as with coal," said Lederer, who represents consumers in District utility regulation matters.
At Lederer's urging, the Public Service Commission in January 1980 started a special investigation of Pepco's construction and planning of power plants. Trying a new proceedure, the PSC designated MacGuineas to hold hearings and take testimony on the issue and issue a recommended decision.
MacGuineas' 105 page ruling singles out the Chalk Point project for extensive criticism in an otherwise generally positive report.
Even though the oil-burning plant is more than 90 percent completed and converting to coal will cost more than the original construction, consumers would still be better off, he concluded.
"The evidence is substantial to an extremely high degreee that coal conversion is still the economic path even at this late date," the ruling said. "The record compels the conclusion that the prompt conversion of Chalk Point Unit 4 to coal-firing capability is the prudent course of conduct for Pepco."
He said financial analysis showed Pepco's customers in the District would save at least $450 million and perhaps as much as $1.6 billion based on Pepco's own projections.
The savings -- --over a 25-year period -- reflect the lower price of coal as a fuel and include the cost of rebuilding the plant to burn coal.
The hearing agent's report chided Pepco for not facing the oil-versus-coal question sooner. Pepco's response in the case "conveys the impression that Pepco has not pursued exploration of coal conversion to a degree warranted by Pepco's own apparent belief that such conversion is in the long run economically beneficial."
Pepco expects to complete its own analysis of the technical problems of switching to coal later this year, said Edward Mitchell, executive vice president for operations.
"Conversion really is a misnomer," added Mitchell, because about 70 percent of the power plant will have to be discarded and rebuilt. The steam turbine that actually generates the electricity can be reused, but the entire boiler and fuel system must be replaced.
Mitchell said Pepco has spent $165 million building Chalk Point 4 and will have to spend another $720 million to put in coal boilers and pollution control facilities. Even if cost of coal is cheaper than oil, the high construction costs and today's record interest rates could result in higher electric bills for the next 10 years, though costs would go down after that, Mitchell said.
Lederer, however, said consulting engineers hired by his office concluded the job would cost no more than $300 million.