Preserve Maryland’s Competitive Electricity Market

Recent calls for Maryland to revert from a competitive electricity market to a monopoly system may be good-intentioned, but they are quite misguided. Innovation has replaced the inefficiencies of the old monopoly system, giving customers new choices, competitive prices and an efficient, reliable power supply.
 
Competition’s success in Maryland is evident. Business and residential customers are finding the lowest-cost rates by choosing alternative electricity suppliers. Multiple new competitive electricity suppliers entered Maryland’s market in 2010, giving customers more choice than ever before and yielding switching rates that have never been higher.
 
In fact, 90 percent of the state’s largest commercial and industrial customers – all large employers – are shopping for the lowest-cost electricity. About 200,000 residential customers of the state’s largest utility now get their energy from an alternative supplier – often at a significantly lower price.
 
Early last year, five major employers who represent 600 facilities and nearly 30,000 jobs in the state urged the state to maintain its competitive market. Recent polling showed 83 percent of voters favor a competitive market that allows choice of their electricity provider.
 
Innovation is also thriving. Time-of-use (TOU) accounts, which reflect the actual price of power as it fluctuates during the day, reached 15 percent by mid-2010. TOU empowers electricity customers to make smart decisions about energy use and costs, and is a hallmark of competitive markets.
 
Competition is driving investment across the state. Since 2007, more than 1,700 megawatts (MW) of generation has come on-line in Maryland – the equivalent of a large nuclear power plant.
 
PJM Interconnection, the region’s power grid operator, has authorized transmission line investments to allow states with excess generation capacity to transmit surplus power to areas where it is needed – including Maryland. These investments won’t be paid for by Maryland’s consumers, but they will benefit tremendously from the additional capacity.
 
And clean energy is growing across the state. Consider the Garrett County wind energy farm that just began operation and is generating emissions-free energy for 23,000 homes. Plans for a 17-MW solar power facility in Frederick County are advancing, and when built, it will be among the largest in the nation.
 
More than 1,760 MW of demand response and energy efficiency capacity has been added. These programs reduce electricity demand when it is highest, such as a hot summer day, and reduce the need for costly new power plants and avoid new emissions.
 
Reverting to the old anti-competitive, monopoly model is a harmful step backward. Without competition, the costs of system investments would be borne by ratepayers held captive to a monopoly utility. Customers would have no ability to switch provider if they were unhappy with their service or the cost of their electricity.
 
Why go back to a failed system that reduces consumer choice and increases consumer costs?