Power struggles

Our view: Electrical supply issues linger

April 20, 2008

The General Assembly's approval of the $2 billion settlement with Constellation Energy Group may have closed the books on stranded costs and other disputed elements of the state's nine-year-old deregulation effort, but it is hardly the last word on electricity. In the months ahead, it's clear some important questions must still be answered, including the most fundamental: Should Maryland reregulate energy supplies?

First, however, there's the matter of making sure the state's electricity customers aren't facing brown-outs or other shortages in as little as three years - as some have warned. More will be known about the state's power supply after the coming wholesale auction by PJM Interconnection, but recent progress in negotiations over the proposed Trans-Allegheny Interstate Line (TrAIL) to transmit power from southwest Pennsylvania to Virginia could markedly improve the outlook for the Mid-Atlantic region.

Potential new natural-gas-fired generation facilities in Frederick and Southern Maryland could also fill the gap - if they're up and running soon enough to address the state's projected power crunch in 2012. And so, too, might the conservation programs recently approved by the legislature - although such efforts (rebates for energy-efficient appliances and the like) raise costs, too.

But those are mere distractions compared with the reregulation decision. The state must decide whether power generation will be regulated - as it was prior to 1999 - or if private companies will bear the risk (and rewards) of building new plants.

Right now, Gov. Martin O'Malley and state lawmakers lack the necessary facts to make an informed decision. That much was clear when the state Senate took up the Constellation settlement during the legislative session. Disgust with the status quo was high on the Senate floor and elsewhere, but knowledge of the consequences of choosing a new path is quite low.

It's up to the Public Service Commission to fully investigate the alternatives, analyze the economic consequences of each, and recommend a course of action for the state by year's end - with all the details, pro and con, fully disclosed to the public. The commission's recent investigation into the 1999 deregulation deal was fruitful enough; now it's time to look beyond it.

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