'Win-Win' in Western Maryland

March 21, 1993

The proposed $300 million Warrior Run power plant in Western Maryland first was billed as a "win-win" situation. But after some large firms realized their utility bills would jump, in one case by $9 million, the proposal became a "win-lose" situation -- a win for the plant developer, a loss for the rate payers. Now that a compromise has been hammered out to delay the plant's opening, the parties involved are calling it "win-win" again.

The Warrior Run co-generation plant near Cumberland has become one complex piece of public policy. Prior to the compromise, the plant pitted east against west, energy issues versus economic ones, and short-term pain versus long-term gain.

Under a federal law that encourages efficient, independently run power generators, Applied Energy Services of Arlington, Va., signed an agreement to build a plant to provide electricity for Potomac Edison, which serves Western Maryland. The facility is called a "co-generation plant" because along with producing electricity its waste steam will be used to heat and cool nearby buildings.

AES guaranteed to use Western Maryland coal -- 650,000 tons a year. Thus the project is seen as an extra boost for that economically stressed region. The project will create 800 construction jobs, 65 plant jobs, 200 mining-related jobs and spin off $3 billion into the state economy in overall jobs, taxes and wages over the 30-year plant contract. Once it was realized that rates would rise substantially, however, some large corporations and legislators east of Allegany County, where there wouldn't be any job gain, raised cain.

Now, with the plant's start-up pushed back from 1996 to 1999, increased power needs should spread the costs and lower the rate. If the final tally is a "win-win," AES deserves special mention: Rather than take an adversarial stance and force this controversy into court, the energy company restructured its project and generated something that, like electricity and steam, can't be held but can be felt and is extremely powerful -- goodwill.

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