The Nuclear Information and Resource Service (NIRS) applauded the recent decision by the Washington, DC Public Service Commission to approve the proposed merger of electric utilities Pepco and Baltimore Gas & Electric (BG&E), with conditions.
The conditions were the key issue, explained Michael Mariotte, executive director of NIRS. While NIRS had opposed the merger outright, due to BG&E’s involvement with nuclear power, Mariotte said, “The Public Service Commission did everything they could to ensure that a merger will not expose Pepco’s Washington DC ratepayers to the hazards and economic risks associated with nuclear power.”
The Public Service Commission’s order explicitly rejected nuclear power for the District, and made as a condition of the merger that DC ratepayers never be exposed to liabilities associated with any of BG&E’s current electrical generating plants. This broader approach was made necessary, the PSC explained, because BG&E had argued that DC could not pick and choose between generating plants (i.e. reject the nuclear Calvert Cliffs while accepting risks associated with other BG&E plants). The PSC agreed with this reasoning, and in order to protect DC ratepayers from Calvert Cliffs, ordered that DC ratepayers not have to pay for any costs of any BG&E plants.
“The PSC decision is a near-total victory for DC ratepayers,” said Michael Mariotte, executive director of NIRS. “The PSC has made clear that nuclear power will not generate electricity for DC residents, and thus DC residents will not have to pay for radioactive waste storage, nuclear accidents, and decommissioning of Calvert Cliffs. This protects the ratepayers, while at the same time bringing them whatever advantages this merger might offer.”
The PSC also ruled that DC ratepayers must share in cost-savings anticipated by the merger, and thus, if the merger takes effect, would receive a rate decrease.
Neither the nuclear decision nor the rate decrease decision is likely to be accepted by BG&E however, which would prefer to spread its risks across a wider customer base. Indeed, the PSC decisioncoupled with a Maryland PSC decision to reduce electrical rates, could spell an end to the merger, and the beginning of a new era of electric competition in the DC area.
“We are especially pleased that the DC PSC explicitly argued that nuclear power should never be part of the generating mix for DC ratepayers,” said Mariotte. He noted that the PSC stated, “It is our conclusion that nuclear power, and all of the risks associated with it, have no place in the District’s generation mix.” The PSC pointed to testimony on these issues by the Washington Metropolitan Area Transit Authority and by NIRS, both of whom objected strenuously to DC involvement with the Calvert Cliffs nuclear plant.
“BG&E should get the message loud and clear,” said Michael Mariotte. “This decision is a rejection of Calvert Cliffs in particular and nuclear power in general. If BG&E hopes to be competitive in the 21st century, it should close Calvert Cliffs now. No one, least of all ratepayers, wants to pay for its continued operation, its increased maintenance and repairs, and least of all, for its nuclear garbage. If BG&E doesn’t close Calvert Cliffs, the utility simply won’t survive in the upcoming era of utility deregulation.”
“The DC PSC has made clear it won’t allow DC ratepayers to pick up the costs of Calvert Cliffs,” Mariotte continued, “so who is left? Calvert Cliffs is a relic of the 1970s; if BG&E won’t close it, this is one utility that won’t be around to compete in the deregulated electricity marketplace.”