Potomac Electric Power Co. has told District regulators that it needs to build three new generators at its Benning Road Station in Northeast Washington, at an estimated cost of $90 million, to meet rapidly rising demand for electricity in the area.
The three oil-burning combustion turbines would be built between 1990 and 1992 to meet peak demand for electricity, usually on hot summer days, the company said.
Pepco also would proceed with plans to build three other power plants, beginning in 1994 and costing at least $2 billion by the time customers began paying for them in the mid-1990s.
This is the third time Pepco has revised its construction plans in less than a year to include more generating capacity. The revisions have been fueled by a rapid surge in demand for electricity in the Washington area in the past few years.
"It's due to the robust economy and the rapid growth in winter energy sales for electric heating," said Nancy Moses, a Pepco spokeswoman.
Pepco officials first told the District Public Service Commission in a meeting three weeks ago that the company wanted to build additional capacity. Utilities like Pepco finance plants by issuing bonds and then paying them off with money collected from customers' bills over many years, so rate-setting regulators must approve construction plans.
The latest disclosure could delay a D.C. PSC ruling that could force Pepco to implement more aggressive energy conservation programs to avert or delay the construction of some new generating capacity, said Luis Wilmot, an official in the Office of the Peoples Counsel, which represents District rate payers before the PSC.
Howard Davenport, general counsel for the PSC, said it is possible the commission will rule on the controversial energy conservation case and deal with Pepco's new plans later.
Pepco officials say the utility will need new generating capacity with or without conservation programs. The question is who will build the plants. Paul Dragoumis, senior vice president and chief strategist at Pepco, yesterday said Pepco had been considering whether to buy 255 megawatts of power -- equal to a midsized power plant -- from nonutility sources or to include that capacity in its own building plans for availability between 1991 and 1993.
Pepco is negotiating with several nonutility power producers and is in fact obligated to buy that power under federal law, but many of the projects have not taken shape and the utility cannot rely on them to meet customers needs, Dragoumis said.
Because of that uncertainty, Pepco would rather build the generating capacity itself, he said.