Constellation Energy Group, BGE's parent company, continues to support deregulated, competitive energy markets. But the company signaled yesterday that it was willing to discuss the governor's proposal, which would exempt its proposed third nuclear reactor at Calvert Cliffs. The company stridently opposes more sweeping re-regulation bills introduced earlier in this legislative session.
"From what we have heard today, but have not yet had a chance to see in detail, the governor's approach differs greatly from the other proposed legislation that we have seen in recent weeks," Constellation Chief Executive Officer Mayo A. Shattuck III said in a statement.
Shattuck called the other proposals "unworkable attempts to reach into the past" that "would lead to further destabilization of the Maryland energy markets."
O'Malley's plan lands in the middle of the 90-day session, giving lawmakers a shortened schedule to consider it. A Senate committee will hold a hearing today on two other bills - one calling for a full-scale re-regulation that would also cover existing power plants and another proposing a more moderate regulatory regime only for new power generation.
O'Malley's administration will present the details of its proposal at the hearing and suggest using one of the existing bills as a vehicle for enacting it.
The governor's proposal would give the Public Service Commission broad powers. Chief among them would be the ability to order, through eminent domain and other authority, that utilities construct new power plants or acquire power through long-term contracts. Those decisions, he said, should be guided by public interest, not profit.
"We cannot afford to tap our feet, stare at our watches and hope and pray that the markets will somehow deliver on its promises," O'Malley said.
The legislation also is aimed at energy companies that are "squatting" on suitable sites for new power plants. Malcolm Woolf, director of the Maryland Energy Administration, noted that Sempra Energy abandoned plans to build a plant at a site in Frederick County that was permitted and close to transmission lines. He said the state could direct a regulated utility to build there.
The governor stopped short of proposing that existing power plants be returned to regulation, under which state-controlled price limits are imposed and utilities are allowed a government-set profit. That's not a practical solution, he said, and could actually add to utility bills as ratepayers bear the cost of buying back aging coal-fired plants that need expensive upgrades.
But Sen. E.J. Pipkin, an Eastern Shore Republican who has been outspoken on energy issues, said he would continue to explore such a scenario, which he contends could deliver savings to consumers. He said the plant asset values have plummeted because of the recession and he was encouraged that O'Malley embraced some form of re-regulation.
"The 10-year experiment is dead," he said.
