Steel Mill Complains About $20,000-a-day BGE Bill

The new owner of the steel mill at Sparrows Point complained last week that it is not being offered any substantial benefit from the proposal to sell Baltimore Gas & Electric Co.'s parent company to Chicago-based Exelon Corp.

The complaint comes as Maryland’s Public Service Commission begins public hearings today on a proposed $7.9 billion deal that would see BGE parent company Constellation Energy sold to Exelon. State law requires PSC approval of the deal.

In written testimony to the PSC, RG Steel Sparrows Point LLC consultant Nicholas Phillips Jr. revealed that the company pays nearly $20,000 a day for natural gas and electric service. The annual bill is about $6.8 million, he estimated.

Phillips wrote that Constellation has “failed to include direct, certain and tangible benefits for Sparrows Point and BGE’s other industrial customers” in its proposals to the PSC. Residential customers of BGE are being offered a one-time credit as part of the deal, he said, but no such credit is being offered to RG Steel.

RG Steel joins several other organizations and political figures in complaining that the Exelon-Constellation transaction offers few benefits to current customers of BGE, a key point for consideration by the PSC.

Most prominent among the critics is Gov. Martin O’Malley, who announced Sept. 17 that he would oppose the deal unless the terms were altered to provide more substantial benefits, both to BGE customers and to the state as a whole.

Dundalk Patch that RG Steel was one of the first organizations in Maryland to openly challenge the proposed Exelon-Constellation merger.

One benefit to BGE customers that has been offered is a one-time $100 credit to all existing residential customers, according to statements from the company.

Based on the calculations used by Constellation in determining the $100 residential credit, RG Steel should be entitled to a similar credit of about $1.1 million, Phillips' testimony states.

Instead of offering $1.1 million, BGE has proposed that RG Steel participate in an energy savings program that could be worth as much as $20,000, according to Phillips’ testimony.

With a daily gas bill of $13,700 and a daily electric bill of $5,480, the offer from BGE covers only a fraction more than the  daily utility bill, Phillips pointed out.

Furthermore, the $20,000 is not a guaranteed payment, and comes with hard-to-measure strings attached, he said.

BGE’s offer “is speculative, contingent and so small as to be inconsequential when considered in the context of Sparrows Point’s operations and overall BGE charges. My proposed one-time bill credit of $1,166,667 cures this failing,” Phillips states in his testimony.

Constellation spokesman Kevin Thornton said the company would have no direct comment on Phillips’ testimony.

"We will be dealing with all the issues in the course of the official proceedings" that began on Monday at the Public Service Commission, he said.