Energy plans cause outcry

Four power plants sought for same area

Safety, environment concerns

Companies say process has enough safeguards

July 07, 2002|By Dan Thanh Dang | Dan Thanh Dang,SUN STAFF

When Maryland deregulated its electric industry three years ago, energy companies around the country didn't stampede into the state with competitive offers to sell cheaper power.

They swamped Maryland with something else: offers to build more electric power plants.

Since 1999, seven out-of-state companies have filed applications to develop plants - an unprecedented pace for a state where one plant every couple of years had been the norm. Another eight or so companies have expressed interest in building here. Concerned about being inundated with power plants, eight state agencies last month called for a halt on multiple plant construction within the same region.

Maryland isn't alone in its apprehension. Tennessee, Virginia and Kentucky, which also have been flooded with proposals to build power plants, have recently imposed moratoriums or are considering them to buy time to examine the consequences of multiple projects.

"It is very much a new era for power plant construction," said J. Charles Fox, head of the Department of Natural Resources, one of the eight agencies charged with making recommendations to the Maryland Public Service Commission about the licensing of each power plant project.

"We've got four plants proposed for a relatively small geographic area," Fox said. "You talk to many in the industry and they say it's very likely that all four will not be built because of demand. But we don't know if these four will be built or whether tomorrow we'll get applications for another four. These are the cards we've been dealt with as a result of deregulation. We are facing a whole lot of issues we never had to deal with before."

The four proposals that spurred the call for a moratorium are for sites that would be located within an eight-mile radius in Frederick and Montgomery counties.

Two companies have filed applications. Houston-based Duke Energy North America wants to build a 640-megawatt station on 25 acres near Point of Rocks in Frederick County. Mirant Corp. of Atlanta wants to expand an existing power plant six miles away near Dickerson in Montgomery County. Hearings at the Maryland Public Service Commission are under way.

Two other companies are planning to file an application. Sempra Energy Resources Inc. of San Diego wants to build a plant at the Eastalco aluminum manufacturing facility near Buckeystown in Frederick County, and Dynegy Corp. of Houston is eyeing a field not too far away.

Residents say they're worried all four plants will be approved because old regulations aren't equipped to deal with multiple requests, said Jodye Roebuck, a Point of Rocks resident who has spent more than a year fighting the Duke plant.

Residents complain that four plants would pollute the air, drain the Potomac River, destroy agricultural land and strain a region already squeezed by encroaching development

After dozens of public hearings, countless hours on the telephone and weeks at the computer setting up a Web site and printing fliers, the state request for a moratorium is the first sign of hope Roebuck has had in her battle.

"I am very, very excited about it," Roebuck said. "Someone is finally addressing what we've been screaming about for a year. We've been saying all along that the laws and rules for licensing plants didn't change under deregulation.

"We've been saying all along that citizens are not protected under the old laws."

In the past, plants were approved based on the needs of each utility's territory. If a utility could prove that more capacity would be needed, state regulators allowed it to build a plant and then recover its investment from ratepayers.

Now, need is no longer the criterion.

Anyone can propose a plant. Plant projects can be approved as long as the effects on Maryland's natural resources are deemed reasonable. And whereas a plant built under the old regulated system produced power that was most likely used within the state, plants that will be built in Maryland now will ship that electricity across state boundaries, in most cases.

Electricity deregulation has made things considerably more complex for Fox, his colleagues at the other state agencies and the Power Plant Research Program (PPRP), which was created by the General Assembly in 1971 to examine the impact of power plants on the Chesapeake Bay and other state resources. PPRP, in concert with state agencies, makes licensing recommendations on each power project to the PSC.

Under the regulated system, the state and PPRP dealt with one plant proposal every few years. A 10-year plan outlining future electricity demand helped guide the state in its decision-making process and allowed regulators to pick and choose from sites deemed suitable for power projects.

Those guidelines no longer apply.

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