Baltimore Gas and Electric Co. is past due on nearly $5.5 million in payments owed to the city for use of a conduit system that carries power and telecommunications lines, according to city officials.
The late payments are causing "cash flow" issues for city government and could delay the start of capital projects, said Jamie Kendrick, deputy director for administration in the city's Transportation Department, which manages the conduit system. Kendrick said the city will either try to negotiate a payment plan with the company or refer the matter to Solicitor George Nilson for possible litigation.
"We are consulting with the Law Department to determine the collection method," Kendrick said. "One option is to go to court, another is to try and negotiate something."
BGE spokesman Rob Gould said the company is disputing a bill it received last year and that it only recently received the second bill that city officials say is past due. In fact, he said, company officials only learned of the second bill when The Baltimore Sun inquired about it.
"We have no record of receiving one of these bills," Gould said.
BGE pays the city for access to Baltimore's elaborate conduit system that consists of 3.9 million feet of concrete casing, at a cost of 90 cents per foot of power cable. The system's conduits carry wires for electricity, telephone service, fiber optics and street and traffic lights. The system is accessed from more than 14,000 manhole structures and stretches throughout most of the city, except its outskirts.
The city relies on payments from BGE and other users to help upgrade the system. Kendrick said the company's late payments have caused "no operational impact yet, but there soon will be."
BGE critics seized on the company's unpaid bills, saying it is quick to cut off residents' power when they miss payments.
"It's very shocking that they're doing that since they're so insistent on everyone else paying," said Chris Bush, a Catonsville accountant and frequent critic of the company who has battled BGE in court over rate hikes. "They cut off people all the time. I'm amazed they have the gall to not pay their bills."
BGE has not paid a bill for $590,000 that was due in August of 2011 or a $4.9 million bill due in May, according to city officials. The company has until the end of October to pay a third bill for $5.4 million, officials said.
Gould said the company disputes the first bill, hadn't received the second and has requested supporting documentation before paying any of the invoices.
"We're going to review the bills," he said.
City officials pointed out that the company should be aware it is billed twice a year.
Community activist Leo Burroughs, who helped organize a coalition to protest BGE rate hikes, encouraged the city to get tough with the company. He also noted a recent Baltimore Sun report that showed businesses, nonprofits and government offices were past due on more than $10 million in water bill payments as well.
"The city has an obligation to collect revenue from big businesses and fat cats, just as they do from lower-income and middle-income people," Burroughs said. "It is outrageous that the city would not take the appropriate legal action to bring to court those big businesses that fail to honor their legal obligations to pay for the services provided by the city."
In June, BGE announced it was seeking to raise distribution rates for electricity and natural gas, a move that would add about $11.80 a month to the median residential bill and must be approved by the Public Service Commission. The company projects that the rate increases would bring in $204.2 million per year.
A related dispute between BGE and city officials flared Wednesday before the Board of Estimates, when the panel voted to raise the rate it charges BGE for access to the conduit system by nearly 3 cents per foot of cable to 92.7 cents.
Kimberly Curry, senior counsel for BGE, spoke out against the increase at the meeting, calling it unnecessary and saying it could end up saddling the company's customers with higher bills.
Gould said the $1.5 million in charges would be passed on to the company's 1.2 million customers across central Maryland, so that the increase to each customer's bill would be minimal. Any rate increase, he added, would need regulatory approval.
Kendrick said much of the rate increase would be spent on improvements to the conduit system on Washington Boulevard, Dundalk Avenue, Charles Street and Broening Highway — some of the system's major corridors.