Businesses Oppose Consumer-Subsidized Generating Plants in Maryland

Commercial electricity customers that collectively provide 35,000 jobs in Maryland have jointly signed a letter to Maryland Public Service Commission (PSC) Chairman Douglas Nazarian urging against moving forward with a state mandate for consumer-subsidized electricity generating plants, calling the mandate unnecessary and warning that it could raise electricity costs for consumers in the state.
 
The 10 companies signing the letter include prominent national retail chains such as BJ’s Wholesale, Macy’s, PetSmart, Rite Aid, Safeway and Wal-Mart; Boston Market, a national restaurant chain; Maryland-based retailer Melvin’s Tire; the popular Maryland Science Center in Baltimore’s Inner Harbor; and industrial electricity customers such as Leggett & Platt. Collectively, the companies operate 357 facilities in the state and spend about $50 million annually on electricity in Maryland.
 
“The companies signing this letter represent just the tip of the iceberg in terms of the potential adverse economic consequences this anti-consumer proposal poses,” said Steve Elsea, director of energy services for Leggett & Platt, a diversified manufacturer that conceives, designs and produces a broad variety of widely used engineered components and products.
 
“The wholesale and retail electricity markets serving Maryland are working well and benefitting the state’s consumers and economy. Mandating consumer subsidies for unnecessary new generating plants will harm consumers and the state’s economy,” Elsea said.
 
The letter points out that the state of Maryland’s own assessment sees no immediate need for new generating plants in the state, and warns that the investment risk of building new generating facilities should remain with investors, not shift to the state’s electricity consumers. The consumer-funded subsidies will harm the electricity markets that are working well to assure continued reliable and affordable electricity supplies for Maryland consumers, the businesses said.

The proposed requirement that the state’s utilities contract for 1,500 megawatts of generation from new natural gas-fired plants in Maryland “is unnecessary for reliability and, if implemented, will likely increase customer costs, both short and long term, while inflicting considerable harm on Maryland’s competitive retail electricity market and the regional competitive wholesale market,” the letter warns.
 
“We are especially concerned that the PSC’s proposed action would reduce or eliminate the benefits that energy competition and choice have provided, in addition to raising costs and transferring the investment risks associated with the energy marketplace from investors to consumers,” the letter explains.
 
“Vibrant electricity markets are important to Maryland’s economic and job growth. Forcing business customers to subsidize in-state plants could drive jobs from Maryland rather than help create jobs,” the letter concludes. “There is no good reason to impose costly subsidies on Maryland’s residents and businesses. Maryland cannot afford it.”