Utility companies may have over-charged consumers $100 million for emergency electrical purchases in states affected by the 110-day coal strike last winter, according to federal energy officials.
William V. Lindsay of the Federal Energy Regulatory Commission told a Senate subcommittee yesterday that so-called "add on" charges for transmitting power between utilities were pyramided up to $100 million and then passed on to consumers.
These costs, Lindsay's disclosure came at hearings called by Sen. Howard Merzenbaum (D-Ohio) a day after the FERC issued a public report saying some utilities in the industrial heartland states hard hit by the coal strike engaged in "extraordinary" operating and billing practices.
"An unprecendented amount of power was bought and sold by the utilities, and on each sale the utility added on an extra charge running from 10 percent to 43 percent," Metzenbaum said.
As electrical power was shifted from one utility company to another, charges added by each company averaged 10 per cent, the FERC said in a report. Most of these charges, in turn, were passed on to consumers in "fuel adjustment charges."
FERC officials have held out the possibility that refunds to consumers could result from a full-scale audit of billing practices by a number of major electrical suppliers in the strike-affected region, including Virginia Electric and Power Co., American Electric power Co., Allegheny Power System, and the Pennysylvania-New Jersey-Maryland interconnection.
Sylvia F.Hancock, a Maryland consumer activist, told the Senate sub-committee on energy conservation and regulation that "Maryland customers were hit more severely than Potomac Editson customers in surounding states."
Said Potomac Edison customers in Maryland were charged $337.23 for every 800 kilowatt hours of service (minus state taxes and surcharges), compared with $243.33 in Virginia and $219.44 in West Virginia for the same amount of service.