Environmental Groups Oppose Maryland Power Plant Subsidies Program

Maryland’s program requiring consumers to subsidize the development of new electricity generation facilities is based on outdated data and will build new generation capacity that is not needed, two environmental groups said in comments submitted to the Maryland Public Service Commission (PSC).
 
The Sierra Club and Chesapeake Climate Action Network submitted the comments in advance of a January 31 public hearing the PSC will convene to consider the request for proposals (RFP) the commission ordered Maryland utilities to issue in an effort to develop 1,500 megawatts of new natural gas-fired generation facilities in Maryland.
 
“The Commission’s legal authority for the RFP requires the Commission to consider ‘market conditions at the time of procurement.’ However, the basis for the purported 1,500 MW of need is a 2008 PJM analysis that relies on outdated assumptions about transmission and demand that have since been revised by the Commission. Current projections show excess capacity throughout the time frame of the RFP,” the two environmental groups said. 
 
“The present RFP is untimely and unnecessary, as there is no demonstrated need for capacity in the foreseeable future,” the environmental groups said in comments that echoed concerns expressed by two groups representing competitive power producers. In separate comments filed with the PSC, the Electric Power Supply Association and PJM Power Producers Group also urged the commission against proceeding with the RFP which relies on outdated information to justify building new generation capacity that is not needed.
 
The Sierra Club and Chesapeake Climate Action Network also objected that the RFP only solicits natural gas-fired generation facilities and ignores the role that energy efficiency and demand resources can play in lessening the need for new generation capacity.
 
That criticism is on point. The capacity market operated by PJM Interconnection, the regional power grid system operator that Maryland is part of, has done a highly successful job of assuring adequate generation capacity resources to keep the lights on in Maryland. PJM’s market has attracted not only new gas-fired generation facilities but energy efficiency and demand-side resources as part of a least-cost mix of capacity resources.
 
PJM’s market is working, and is benefitting Maryland’s economy and consumers. The PSC should stand down and not impose billions of dollars in costs on consumers to build unnecessary generation facilities.

Joel Malina | January 24, 2012