Gov. Martin O'Malley asserted a stronger government role in averting an expected energy crunch yesterday as he laid out a multipronged plan for bringing more electricity into Maryland before the state is faced with rolling blackouts predicted for 2011.
The Democratic governor, in a speech to a conference of local government officials in Ocean City, proposed several ways to put more power on the grid, including encouraging localities to build their own generators and contracting with renewable power ventures. He also said the state should accelerate the installation of high-tech gadgets in homes to help residents reduce their energy use at times of peak demand when it's most expensive.
If the power shortfall is not solved, O'Malley said, it may be necessary to direct utilities such as Baltimore Gas & Electric Co., Maryland's largest, to find additional power supplies or build a new plant to ease supply constraints.
The Public Service Commission, the industry's regulator, began laying the groundwork for such a move through an order issued last week.
"We cannot, cannot stand idly by and wait for market forces or the electricity good fairy to come in and solve this problem for us," O'Malley told the annual conference of the Maryland Association of Counties. "We know that there's no new generation coming online. We have to do something about this now or the rolling brownouts and blackouts will happen."
The proposals mark a stark reversal from the state's effort to deregulate the electricity industry in 1999, a free-market experiment that many politicians and policy wonks now regard as a failure. State officials said that while the governor's proposals fall short of wholesale re-regulation, the ideas reflect a desire to act rather than wait for market forces to right the supply-and-demand imbalance.
But while O'Malley's proposals could drive down electricity prices, some of the upfront capital costs would be borne by residents, potentially adding to utility bills at least in the short term. Residents already have seen some of biggest price spikes in the country in recent years.
The prospect of pushing utilities to own generating assets also sets up a potential clash with Constellation Energy Group, BGE's parent company, and could discourage other companies from entering the market, industry analysts say.
