O'Malley, who campaigned on promises to address rising utility bills and would face re-election one year before the blackouts are expected to hit, has had a confrontational relationship with Constellation.
BGE transferred its power plants to an unregulated affiliate of Constellation as part of deregulation, and now it must buy electricity on the wholesale grid, where prices are high. Officials with Constellation, a publicly traded company, have said that ordering utilities to build plants would shift risks, such as rising fuel costs, from shareholders to ratepayers, who also would foot the cost of construction.
"Key to any solution set must be the ability to balance affordability, reliability and sustainability, all of which are critical to making Maryland an attractive place for future energy investment," Constellation spokesman Robert L. Gould said in a statement.
No new large-scale power plants have been built in Maryland in decades, despite population growth and development. Constellation's plan to build a new nuclear reactor may not come to fruition until at least 2015. Similarly, efforts to build high-voltage transmission lines to bring more power here could take years.
O'Malley said he would seek legislation in the General Assembly next year to enable the state to float bonds to finance building small "peaking" plants by cities and counties to provide power during peak demand times, when the system would be most vulnerable to disruption. Such plants could cost several hundred millions of dollars.
The state is working with the town of Thurmont in Frederick County on such a project, and Easton in Talbot County has owned its own diesel-powered generation for decades.
The proposal is likely to be met with some skepticism in the legislature. Sen. E.J. Pipkin, an Eastern Shore Republican who frequently speaks out on energy issues, said government agencies might not be equipped to build and run power plants. But the lawmaker said he was encouraged that the governor acknowledged the current system is "busted" and a new model is needed in Maryland.
"How we get there is going to be open to a lot of interesting debate for the next several months," Pipkin said.
O'Malley also broached the possibility of partnering with federal agencies that maintain on-site generation in Maryland. He vowed to help lower-income residents with utility bills, saying that more needs to be done to provide those families with conservation technologies such as energy-saving appliances, and to find ways to speed the deployment of "smart meters." BGE has a pilot program for the meters, which tell consumers the cheapest times to run the dishwasher or washing machine.
The governor drew applause when he said he would seek to make Maryland a "national leader" in renewable energy. The idea would be to enter into long-term contracts with renewable energy providers, helping them to draw private investors and the necessary capital to build the projects.
State officials said the contracts could accelerate Delaware's plan to develop an offshore wind farm and bolster proposals for a power plant fueled by poultry litter on the Eastern Shore. The state, Baltimore City, Montgomery County and the University of Maryland have agreed to pool their buying power to attract commercial development of renewable power.
In closing his speech yesterday, O'Malley said that while he plans to pursue many solutions to the complex energy problem, he's uncertain of the outcome.
"I really don't know how this one turns out," he said. "I wish I could tell you that I do."
laura.smitherman@baltsun.com
