The federal Energy Regulatory Commission will audit the waypower companies serving Pennsylvania, New Jersey and Maryland priced and sold electricity to utilities that needed emergency help during the coal strike, the Maryland Public Service Commission announced yesterday.
Commissioner William S. Baldwin told a special hearing on high strike-related electricity bills in Western Maryland that both federal and Maryland auditors would also examine the fairness of electricity distribution systems used by the Allegheny Power System that supplies the area.
At the same time, high bills for Western Maryland customers of Potomac Edison Co., one of the four corporate members of the Allegheny Power System, will persist through June, according to the president of the Potomac Edison company.
Baldwin opened the second day of the hearing by saying the federal body had volunteered to conduct the aduit, fulfilling one of the demands of Western Mayland citizen groups outraged over March bills. The tabs were 30 percent or more above last year's level.
Potomac Edison president John M. McCardell told the hearing that the company will reduce the amount due immediately on March bills and will provide partial refunds or credits to customers who have already paid the full amount.
That offer did not satisfy Sharron Hawk or Caryl Cline of Poolesville. "This is fine as long as it's part of a total agreement on a permanent roll-back," said Hawk, head of a special citizens' committee, "It's all nitpicking here today and I'm worried that this (company offer) is all that's going to happen."
The Public Service Commission is expected to rule today on a request from People's Counsel Jack Keane that one-third of the bills be deferred and that changes be made in the fuel adjustment section of the bill, where effects of the coal strike were most apparent.
McCardell said the company stockpiled as much coal as possible - a 91-day supply - before the strike began, and developed a conservation program during the walkout to stretch the coal over a longer period. Nevertheless Potomac Electric still had to spend $14.7 million in January and February to buy power from neighboring utilities to meet demands. March spending for added electricity will be another $10 million, he said.
"It takes several months for these high power costs to work their way through the bill," he said. "It would be June before the high cost of these power purchases disappears from customer bills."
McCardell noted that state officials in Maryland, West Virginia and Virginia had urged Potomac Edison to buy more outside power instead of ordering wide electricity cutbacks that would have meant job layoffs.
The coal strike settlement, even though it means a rise in coal prices, will find Potomac Edison bills returning to a level that is still lower than that of oil-fired companies, he said.
Without the emergency purchases, "our customers" real choice would have been between these higher rates and no electricity at all," McCardell said.
McCardell and five other company witnesses yesterday defended the current structure of the fuel adjustment clause that Keane and a dozen Western Maryland residents earlier this week denounced as unjust. "No one in this world can deliver electricity to the customers unless he can pay the cost of fuel. We're not magicians," McCardell said.
He said fuel adjustment charges are "the most frequently scrutinized costs of any part of our operations," reviewed regularly by commissions in five states. "Many customers apparently believe we can do anything we want to under the fuel adjustment clause," he said.
Keane's proposed limit on any one monthly bell would cause "serious problems" for the company, Potomac Edison comptroller James W. Nicol, said, because it would have to borrow money to pay its own fuel bills. Customers would then have to shoulder the interest costs through later, higher bills, he said.
Under the company plan, customers would be refunded 1 cent for every kilowatt hour of usage on their March bills, with repayment of that amount to the company spread out over the next four months.