2-1-11: Maryland’s Electric Marketplace
The oversight and regulation of electricity has been an issue in Maryland for more than a decade. In the most recent turn of events, last month, Maryland’s Public Service Commission drafted an order calling for proposals for new generating facilities to be built in the state.
Jay Hancock, financial columnist for The Baltimore Sun, says that makes it an opportune time for the state to consider re-regulation.
Meanwhile, Jim Connaughton, executive vice president for corporate affairs of public and environmental policy for Constellation Energy, says that if the government re-regulates utilities, it takes away the benefits of a competitive marketplace.
“If the government can come in after the fact and take away the benefit of the competitive investment you just made, people aren’t going to want to compete in the state,” Connaughton said. ” You’re right back to the old system of the government trying to figure out how to manage all these investments rather than letting market competitors figure that out.”
A new study out from Baltimore Gas and Electric shows that 20% of the company’s residential customers are now buying power from a third-party supplier. That’s up double from last year. The company describes how consumers can choose on their website.
Meanwhile, Malcolm Woolf, director of the Maryland Energy Administration, says the current system is broken, and no new sources of generation are being built.
“Basically, power plants are expensive,” Woolf said. ” What the deregulation effort a decade ago has proven is that investors are not willing to pay hundreds of millions of dollars to build a product unless they know there’s a market for it. We took away the guaranteed market by having them sell as merchant generators to anyone who will buy. So plants are not getting financed, and they’re not getting built.”
Nathan Sterner talks about the current marketplace with Jay Hancock, along with Paula Carmody, the People’s Counsel for Maryland.
And here, just for the web, Paula Carmody discusses Governor Martin O’Malley’s bill for offshore wind power:
Plus, Jay Hancock and Paula Carmody discuss the prospects of a rumored resubmission of a General Assembly reregulation bill that passed the Senate—but not the House of Delegates—in 2009: