PSC is asked to speed plant

CPV wants to build power generator in Charles County

December 18, 2007|By Paul Adams | Paul Adams,SUN REPORTER

A Silver Spring company said yesterday that it submitted an application to build a $400 million natural gas-fired power plant in Charles County to provide electricity to about 600,000 homes in Washington and Central Maryland.

Competitive Power Ventures asked the state Public Service Commission to expedite its review of the project in hopes of getting it finished by 2011 - the year energy experts say Maryland faces rolling blackouts unless new power sources are developed.

Even if regulators rush the process, some energy experts see little chance the plant can be in service that quickly. If successful, the plant could be the first built in Maryland in decades.

The project is one of several that wholesale energy suppliers have proposed this year to resolve the state's projected energy shortfall.

CPV's application comes a few weeks after the PSC issued a report criticizing the competitive wholesale energy market for not moving fast enough to build needed generation in the face of rising prices and dwindling supplies.

The commission proposed requiring utilities to enter into long-term contracts to spur development of new power plants, arguing that Maryland can't afford to wait for the competitive market to respond to the crisis.

That and other potential reforms would constitute a partial re-regulation of the power business, which lawmakers deregulated in 1999.

Consultants hired by the PSC to study generation options determined that constructing up to 1,200 megawatts of gas-fired generation was among the best short-term solutions to the state's energy problem. The CPV plant would add about 640 megawatts, or about half that amount.

Baltimore's Constellation Energy Group is considering adding 650 megawatts of natural gas-fired generation to its Perryman facility in Harford County.

Constellation also said last week that it had agreed to buy all of the power from a proposed gas-fired plant being built by Conectiv Energy in York County, Pa. Power from that plant is unlikely to have a direct benefit to the Baltimore region.

The CPV project still must clear regulatory and financial hurdles to succeed. Sharon K. Segner, director of the project for CPV, said the company is in negotiations with utilities and others to buy power from the plant through long-term contracts. Such agreements are often necessary in order to lock in financing for a project.

"The prospects are very strong for the project, but certainly there are still risks out there," Segner said.

First announced in July, the Charles County project would bring more power to a part of Maryland that is especially challenged by a lack of transmission and generation.

Competitive wholesale market rules and pricing mechanisms result in higher prices for residents in areas that lack adequate supplies. Maryland imports nearly 30 percent of its power from surrounding states, but congestion on interstate transmission lines makes importing additional supplies increasingly difficult and expensive.

"This [plant] does alleviate some of the congestion problems," said Skip Trimble, a senior analyst with South River Consulting in Baltimore.

Much of the power from the proposed plant will likely end up feeding residents in the Washington metro area, but the additional generation flowing into the grid will also benefit parts of Central Maryland.

The plant would be located at the Piney Reach Business Park near St. Charles. The PSC granted a permit for Free State Electric LLC to build a 1,650 megawatt gas-fired power plant on the same site in 2001. That project was later canceled as financing for such projects dried up nationwide after the scandal that followed the collapse of Enron Corp.

CPV says the combined-cycle gas plant will incorporate technology making it among the cleanest in the state and nation.

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