ANALYSIS OF BALTIMORE GAS AND ELECTRIC COMPANY'S TECHNOLOGY CHOICE.

The Baltimore Gas and Electric Company (BGE) must select a strategy for adding 600 megawatts of electric generating capacity at the Perryman site near Baltimore to come on-line in the 1990s. This paper reports an analysis that evaluates strategies involving either a conventional coal facility or one of three technologies not currently available commercially. A key issue is whether the perceived advantages of the new technologies are worth the risks of not having the generation capacity early enough to meet load growth. The analysis evaluates strategies using several BGE objectives, including customer cost, shareholder return, coporate image, health and safety, and feasibility. Uncertainties addressed in the analysis include load growth, time when a new technology becomes available, and construction and licensing delay. The analysis is partially based on preliminary input information, but designed for iterative use incoporating better information.

Duke Scholars

Author Ralph L. Keeney Fuqua School of Business