Maryland residents face the prospect of power shortages and higher electricity rates unless the state moves to reimpose some regulation on the industry, members of the state Public Service Commission concluded in a preliminary report to lawmakers yesterday.
The report is critical of the competitive power market, concluding that unregulated electricity suppliers can't be relied on to deliver low-cost electricity or to build enough power plants to ensure that the lights stay on.
But the commission said that full re-regulation of the power industry would be too expensive and impractical.
Instead, it recommends spurring construction of new power plants by requiring utilities to enter into long-term contracts with generators. The move would coincide with other proposed reforms in the way utilities buy power through suppliers in the competitive market.
Regulators also are considering a variety of proposals to reward consumers for reducing consumption, which would help to relieve upward price pressure in the regional energy market. The measures coincide with Gov. Martin O'Malley's call on consumers to reduce energy consumption 15 percent by 2015.
"In our view, it is not in the public interest to continue to rely exclusively on market forces to address Maryland's reliability concerns and the high wholesale electricity prices Marylanders pay," the commission said.
PSC Chairman Steven B. Larsen declined to comment on the report yesterday, saying he wanted to give lawmakers a chance to review it.
A spokesman for Baltimore Gas and Electric, Maryland's largest utility, said the company is reviewing the findings.
The 45-page report was the commission's first answer to legislation passed last spring requiring it to study options for re-regulating the power industry.
Lawmakers also asked the commission to look at options for addressing the state's projected energy shortfall, among other things. Its preliminary findings will be presented to the Senate Finance Committee today.
The commission is expected to issue a number of additional reports and regulatory orders in coming weeks and months.
"Over a decade ago, a number of states moved to see if competition would bring prices down," said Sen. President Thomas V. Mike Miller. "What started out as a noble cause - not fueled by lobbyists or special interests, but a desire to bring down rates - really didn't result in the same."
