We've been reporting that New Jersey has grown tired of paying the high prices for electricity caused by PJM's failed reliability pricing model, which was supposed to attract new in-state generation. Now Maryland has joined the parade, and on Thursday the Maryland PSC issued an order requesting proposals for new natural gas-fired generating capacity in Maryland's BG&E and Pepco zones by October 7.
The problem, according to the Maryland PSC:
"The Commission finds that Maryland continues to face the threat of insufficient new capacity, as PJM's capacity market construct, the Reliability Pricing Model ("RPM"), has been unsuccessful in attracting appreciable new generation to the State since its inception in 2007, despite the fact that RPM has imposed prices in the Southwest MAAC zone that are approximately double that of the rest of the PJM region. The resultant risk to Maryland's long-term reliability is further heightened by several factors including (i) Maryland's status as a net importer of electricity, importing about 30 percent of its electric needs each year; (ii) the cancellation or postponement of certain large scale transmission projects coupled with the unpredictable transmission planning process that has become characteristic of PJM's Regional Transmission Expansion Plan; (iii) the potential that load forecasts could rise unexpectedly; (iv) the increased reliance the State has had to place on demand response to compensate for anemic electric capacity growth; (v) the risk that Environmental Protection Agency regulations and future State and federal emissions legislation could cause substantial retirements of base-load generation, especially coal plants, in the State and throughout the PJM region; (vi) the fact that Maryland relies heavily on coal plants for its electric generation needs; and (vii) the significant number of renewable resources anticipated to come on-line within PJM as a result of Maryland and other state Renewable Portfolio Standards, which, because of the variable nature of their output, will increase the need for regulation services from exiting and new conventional generation."
Maryland tries to be a bit "nicer" than New Jersey about it, but the message is clear. Maryland is no longer content to be a victim of PJM's skewed markets which favor transmission solutions that provide huge profits to incumbent, coal-dependent, Ohio Valley mega-utilities such as AEP and FirstEnergy.
"Although the Commission recognizes and appreciates PJM’s role in planning regional transmission solutions, Maryland law directs this Commission to ensure an adequate and reliable supply of electricity to Maryland citizens. Where that supply may fall short, Public Utilities Article § 7-510(c)(6) authorizes this Commission to require investor- owned electric companies in Maryland to “construct, acquire or lease, and operate generating facilities in order to meet long-term anticipated demand in the State for standard offer service and other electricity supply.”
"Because market forces have not produced new generation in our region, the Commission may need to invoke its authority under §7-510(c)(6) if the record in this case demonstrates long-term risks of a projected capacity shortfall in an upcoming Delivery Year and that ordering the construction, acquisition, lease or operation of additional capacity resources would satisfy the long-term anticipated demand in Maryland for Standard Offer Service or other electricity supply."
PJM and the coal gluttons need to realize that the transmission party is over. The two biggest victims of the scam are taking matters into their own hands and providing the solutions that PJM couldn't and wouldn't.
Bravo, Maryland and New Jersey!
The problem, according to the Maryland PSC:
"The Commission finds that Maryland continues to face the threat of insufficient new capacity, as PJM's capacity market construct, the Reliability Pricing Model ("RPM"), has been unsuccessful in attracting appreciable new generation to the State since its inception in 2007, despite the fact that RPM has imposed prices in the Southwest MAAC zone that are approximately double that of the rest of the PJM region. The resultant risk to Maryland's long-term reliability is further heightened by several factors including (i) Maryland's status as a net importer of electricity, importing about 30 percent of its electric needs each year; (ii) the cancellation or postponement of certain large scale transmission projects coupled with the unpredictable transmission planning process that has become characteristic of PJM's Regional Transmission Expansion Plan; (iii) the potential that load forecasts could rise unexpectedly; (iv) the increased reliance the State has had to place on demand response to compensate for anemic electric capacity growth; (v) the risk that Environmental Protection Agency regulations and future State and federal emissions legislation could cause substantial retirements of base-load generation, especially coal plants, in the State and throughout the PJM region; (vi) the fact that Maryland relies heavily on coal plants for its electric generation needs; and (vii) the significant number of renewable resources anticipated to come on-line within PJM as a result of Maryland and other state Renewable Portfolio Standards, which, because of the variable nature of their output, will increase the need for regulation services from exiting and new conventional generation."
Maryland tries to be a bit "nicer" than New Jersey about it, but the message is clear. Maryland is no longer content to be a victim of PJM's skewed markets which favor transmission solutions that provide huge profits to incumbent, coal-dependent, Ohio Valley mega-utilities such as AEP and FirstEnergy.
"Although the Commission recognizes and appreciates PJM’s role in planning regional transmission solutions, Maryland law directs this Commission to ensure an adequate and reliable supply of electricity to Maryland citizens. Where that supply may fall short, Public Utilities Article § 7-510(c)(6) authorizes this Commission to require investor- owned electric companies in Maryland to “construct, acquire or lease, and operate generating facilities in order to meet long-term anticipated demand in the State for standard offer service and other electricity supply.”
"Because market forces have not produced new generation in our region, the Commission may need to invoke its authority under §7-510(c)(6) if the record in this case demonstrates long-term risks of a projected capacity shortfall in an upcoming Delivery Year and that ordering the construction, acquisition, lease or operation of additional capacity resources would satisfy the long-term anticipated demand in Maryland for Standard Offer Service or other electricity supply."
PJM and the coal gluttons need to realize that the transmission party is over. The two biggest victims of the scam are taking matters into their own hands and providing the solutions that PJM couldn't and wouldn't.
Bravo, Maryland and New Jersey!
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