OHIO EDISON'S SALE OF POWER TO PEPCO COMES UNDER SCRUTINY

OHIO EDISON'S SALE OF POWER TO PEPCO COMES UNDER SCRUTINY

Ohio Edison Co.'s bulk sale of electric power to a Washington, D.C., utility is coming under scrutiny because electric bills there are up to 50 percent cheaper than bills in northeast Ohio.

Every day Potomac Electric Power Co. buys up to 450 megawatts of electricity - more than enough to power the city of Akron - from Ohio Edison at wholesale prices. The Ohio power represents about 15 percent of Potomac Electric's daily electricity needs.Opponents of Ohio Edison's pending two-step, 13.5 percent rate increase for the Beaver Valley 2 nuclear plant say that the relatively high electric rates in Edison's service territory are subsidizing lower rates in the more affluent Washington metropolitan area.

"I understand they're selling it a helluva lot cheaper than we're buying it in Youngstown, and Ohio," said Albert A. Chance, a Youngstown councilman who is chairman of the City Council's Public Utilities Committee.

Ralph DiNicola, Edison spokesman, denies that Edison customers are subsidizing Pepco's low rates.

"Our largest industrial customers with similar use patterns pay less than Pepco," he said.

The Pepco sales bring Ohio Edison $150 million annually, money that Edison might have to borrow or charge to Ohio customers, and the 450 Mw sold daily to Potomac Electric is not in Ohio's customer rate base, Mr. DiNicola said.

The electric capacity related to the bulk sale also is excluded from the Ohio rate base, he said.

But Mr. Chance and others say the industrial gutting of northeast Ohio and western Pennsylvania, combined with a massive nuclear plant construction during the last 15 years, has created an excess of expensive electric generating capacity. Edison, and its subsidiary Pennsylvania Power, serves nearly 1 million customers spread over 9,000 square miles.

A U.S. Department of Energy survey details the difference between what Washington and Akron residents pay for 750 kilowatt-hours of electricity:

* Ohio Edison customers pay $73.88 a month.

* Potomac Electric customers in the District of Columbia pay 50 percent less, $36.73 a month.

* Potomac Electric customers in Maryland suburbs pay 43 percent less, or $42.03 a month.

Langdon Bell, a lawyer representing northern Ohio manufacturers opposed to Edison's pending rate case, said: "That (Pepco) sale is at a rate far, far, far less than the cost of Beaver Valley (2) and Perry, which allowed that sale to take place."

Perry 1 is a nuclear plant in North Perry Township that was completed in November 1987. Beaver Valley 2 is in Shippingport, Pa., and added 349 Mw to Edison's generating capacity.

Some critics say that since the sale of power to Potomac Electric is more than the output of Beaver Valley 2, the new nuclear plant is not needed.

Pepco first signed a contract to buy Edison-generated power in 1987. The contract runs until 2005.

Mr. Chance said bluntly, "We feel that the Ohio Edison management has screwed up and the (Ohio) rate-payers are paying for it."

Edison's Mr. DiNicola said, "We do not have excess reserves." He said Edison only gained 321 Mw during the 1980s because the utility was forced to retire seven aging generators because of pollution-control regulations.

Also, he said, during the last decade customer peak demand increased by 600 Mw.

Potomac Electric spokeswoman Nancy Moses said, "We took advantage of excess capacity in the Midwest" when describing the bulk electricity purchase

from Ohio Edison.

Pepco has kept its rates low by canceling $2 billion worth of new coal and nuclear plants in the late 1970s, encouraging conservation and buying low-cost power from the electricity-rich utilities, Ms. Moses said.

With this strategy, electric rates in a relatively expensive area to live have been kept low.

Federal government figures show that the per capita income in the Washington metropolitan area was $21,539 in 1987. In Akron, the per capita income was $15,115 in 1987 - the latest federal figures available. And in Youngstown, it was even lower, at $13,238.

"Ohio Edison capacity is very important to us," Ms. Moses said. "It was cheaper than building 450 Mw ourselves."