Commercial customers have criticized the Potomac Electric Power Co. for not building a new generating plant, and say they may not comply with a voluntary Pepco conservation program designed to defer the plant's construction.
The Apartment and Office Building Association (AOBA) of metropolitan Washington, in letters to Maryland and D.C. utility regulators, challenged Pepco's assumption that large numbers of commercial customers are willing to curtail electricity consumption during times of peak demand so the utility will not have to build a costly new plant until the 1990s.
Pepco has proposed the voluntary program, coupled with other residential and commercial energy management programs. The plan is expected to reduce demand by 440 megawatts by the early 1990s. The company will continue to buy power from other utilities with excess capacity.
"The way Pepco is going to avoid building the plant is by assuming 80 percent of its largest 1,250 customers will volunteer to have their service curtailed," said Bruce Oliver, a consultant to the 1,000-member association. "It's a heck of a decision to enter into without any public discussion or review."
Pepco's "analyses are inadequate and incomplete and its findings are driven by unrealistic and unacceptable assumptions," said Frann G. Francis, general counsel to the asssociation, in a letter to the Maryland Public Service Commission. "Pepco's planned dependence on widespread voluntary customer participation . . . is neither reasonable nor acceptable."
A copy of the letter also was sent to the D.C. Public Service Commission. The association is awaiting a decision by the District PSC on whether to investigate the matter, Francis said. No formal investigation of the complaint has been launched by the Maryland PSC.
Gregory Carmean, assistant Maryland people's counsel, said Pepco's plans were "worth looking into." But he noted that the Maryland PSC found large reserves of generating capacity during its last examination of Pepco, although no review has been conducted recently.
"We don't agree with their AOBA's assumptions," said Pepco spokeswoman Nancy Moses. "We believe our forecasts are as accurate as forecasts can be, based on sound evidence and trends." Pepco "expects the benefits to the customer are good enough that we will have enough customers participating to make it work," she said.
The association fears that postponing the new plant could force Pepco either to purchase more costly electricity from other utilities or install more expensive technology at the last minute if demand exceeds supply in the early 1990s. Such costs would be passed along to ratepayers and "there might be a moratorium on connections" to Pepco, further hurting local businesses, Oliver said. "We are very concerned."
Oliver said the utility will need more capacity by the 1990s. "The question is what's the most economic way to do it."
He said the utility should consider joint construction of plants with other utilities, allowing buildings to pool electricity, and long-term contracts to purchase power from other utilities.
Pepco currently has "significant" agreements for purchasing power from local utilities, Moses said. The company, she added, is open to "creative solutions to saving energy," such as encouraging buildings near each other to share an electricity plant.