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Sat, 07 Dec 2024 10:56:11 GMT (1733568971058)
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MARYLANDERS BRACE FOR SKYROCKETING ENERGY COSTS IN 2025 AS FOSSIL FUEL POWER
PLANTS CLOSE
--------------------------------------------------------------------------------
by GARY COLLINS | FOX45 News
Thu, August 15th 2024 at 9:55 AM
Updated Thu, August 15th 2024 at 9:58 AM
7
VIEW ALL PHOTOS
High voltage power line sways in the wind on July 27, 2024, in Carroll County,
Md. during a sunset. This power line and power structure is similar to the
development sought by the controversial Maryland Piedmont Reliability Project.
(Gary Collins/FOX45 News)
6
TOPICS:
Maryland
Energy costs
Power plants
PJM
2025
Electric bills
Green energy
Deregulation
ANNAPOLIS, Md. (WBFF) — Marylanders could see significant increases in their
monthly electric bills by 2025, a FOX45 News investigation finds.
The region’s power grid operator and local utility companies informed FOX45 News
that Maryland is facing a trifecta of escalating problems contributing to a
mounting statewide energy crisis.
Energy conglomerates said that rapid power plant closures, increasing energy
demands, green energy policy priorities and an outdated power grid are driving
up the cost and complexity of keeping the lights on.
Baltimore Gas and Electric told FOX45 News via email on Tuesday that their
residential customers can anticipate an average monthly bill increase of about
$18 starting in June 2025. This cost alone will average roughly a 11% monthly
subtraction from household budgets, totaling more than $2,100 over 10 years.
PEPCO, which services customers in the D.C. area, told FOX45 News late Wednesday
that its customers in both Maryland and Washington, D.C. will experience
increased costs in June 2025.
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“We anticipate PEPCO’s average residential electric customer in Maryland will
see approximately $11 increase in their monthly bills and we expect
approximately $12 increase for residential electric customers in the District of
Columbia,” PEPCO’s spokesperson Chuck McDade said.
Both utilities stated that the increased costs being passed down to consumers
are the result of significant increases in wholesale energy pricing realized
during regional power grid operator PJM’s annual capacity auction. These
standalone hikes do not reflect a delivery rate or fee increase.
> The significant increase in capacity auction prices is a clear market signal
> identifying the lack of 24/7 electric generation facilities in central
> Maryland and highlighting the need to increase generation capacity and
> electric transmission infrastructure to import electricity from other parts of
> PJM’s service area,” BGE’s spokesperson said.
The U.S. Energy Information Administration (EIA) says on its website that a
24-hour power plant relies on thermal electric generation from fossil fuels such
as coal, natural gas or nuclear sources. Solar, hydroelectric, wind and waste
are forms of renewable energy, but are not able to consistently produce the same
power as their fossil fuel rivals, according to the federal agency.
High voltage power line sways in the wind on July 27, 2024, in Carroll County,
Md. during a sunset. This power line and power structure is similar to the
development sought by the controversial Maryland Piedmont Reliability Project.
(Gary Collins/FOX45 News)
PEPCO said that the reliability of energy production is challenging despite the
investments they have made to deliver energy to their customers.
“The elevated price levels reflect both a scarcity of resources and transmission
constraints,” McDade said.
Meanwhile, in Northern Virginia, Dominion Energy says its customers will be
shielded from higher wholesale energy costs because their state generates
abundant power to fulfill residential needs.
> In Maryland, utilities are unregulated and do not generate most of their own
> power,” Dominion Energy’s Aaron Ruby told FOX45 News. “Virginia is different.
> We’re a regulated utility, so we generate the vast majority of our own power
> and rely much less on the wholesale and capacity markets.”
“Capacity market purchases account for less than 1% of our customer’s monthly
bills,” Ruby added.
Marylander’s anticipated electric bill hikes in 2025 are not the first time the
state’s deregulation policy has been blamed for higher energy costs.
Deregulation advocates argued that the Electric Customer Choice and Competition
Act of 1999, passed by the Maryland General Assembly, would reduce electric
prices in the state.
State energy records show that before deregulation, electricity companies
obtained, produced and delivered electricity to their customers within their
designated service areas. This monopoly system was tightly regulated to ensure
customers paid the actual cost of energy production, factoring in a modest
profit for the utility company.
Deregulation required utility companies to sell their power plants, making
suppliers like BGE and PEPCO collaborate with electric grid operator PJM and the
new power plant owners to deliver power to the same customers.
After Maryland utilities offloaded power plants to new owners, many of those
plants shut down their power generation operations, state energy records show.
Suppliers were then forced to work with PJM to import energy from surrounding
states to meet Maryland’s increasing needs with its exponentially shirking
ability to be energy self-sufficient.
The Harrison Power Station's stack soars above Haywood, W.V. on July 29, 2024,
as smoke from its coal-burning operation billows. This power station is part of
PJM's multi-state electricity connection network. (Gary Collins/FOX45 News)
Importing energy through the wholesale market, or other states, resulted in a
change from ‘actual costs’ to ‘market’ or ‘capacity’ costs in terms of what
customers would be charged. This change was blamed in 2012 when BGE customers
saw a nearly 72% increase in their electric bills.
PJM online publications show that since 2018, the closure of power plants has
led to a decrease of 6,000 megawatts (MW) of generated power in the state, with
only 1,600 MW of new capacity being added to meet the state’s electrical
demands.
The power grid operator said in 2023 that Maryland had to import between 1,000
MW and 6,000 MW hourly from surrounding states.
Using PJM’s formula, 1 MW powers about 800 Mid-Atlantic homes, meaning 800,000
to 4,800,000 homes relied on out-of-state energy to function. Only 2.38 million
households exist in Maryland, according to 2022 U.S. Census data. PJM’s data
would mean that nearly all of Maryland’s households were powered by imported
energy.
Residential energy use makes up about 30.8% of the total end-use consumption in
the state, according to the U.S. Energy Information Administration.
Maryland Energy Consumption by End-User Sector, 2022 (Energy Information
Administration, State Energy Data Systems)Click here to view the PDF file.
Power grid operator filings show that Maryland’s energy production is expected
to decline even further in June 2025 as the Herbert A. Wagner, Brandon Shores
and Vienna power plants are set to close. These power plants current generate
approximately 2,290 MWs of energy.
A whopping 92% of the energy slated for elimination is from power plants zoned
to supply BGE customers, PJM records show.
Fossil fuel power plant closures are being ramped up across the state due to the
Climate Solutions Now Act of 2022. This initiative has been a fast-tracked
hallmark of Gov. Wes Moore’s agenda since taking office.
The law mandates an increase in the deployment of electric vehicles, the
electrification of homes, and the transition of the state’s power generation to
green solutions.
Jason Kalwa, PSEG's project manager for the Maryland Piedmont Reliability
Project, answers questions during a town hall in Frederick, Md. on Wednesday,
July 31, 2024, about eminent domain use to complete his company's power grid
expansion plan. (Gary Collins/FOX45 News)
A PJM report published in February 2023 said there may be a “potential timing
mismatch” between closing fossil fuel power plants and increasing energy growth.
This is compounded by Gov. Moore’s announced desire to bring energy-sucking data
centers to Frederick and throughout the state.
“Thermal generators are retiring at a rapid pace due to government and private
sector policies as well as economics,” PJM said. “Retirements are at risk of
outpacing the construction of new resources.”
PJM said in itsreport that 94% of new proposed power plant generation were green
locations.
“PJM’s interconnection queue is composed primarily of intermittent and
limited-duration resources,” the grid operator said. “[W]e need multiple
megawatts of these resources to replace 1 MW of thermal generation.”
> [T]he historical rate of completion for renewable projects has been
> approximately 5%,” PJM added.
FOX45 News asked PJM on Wednesday if the Maryland Piedmont Reliability Project
is directly linked to deregulation and accelerated green energy priorities in
the state, which are causing power plants to close rapidly. A spokesperson for
the power grid operator said their demands for the project stem from multiple
factors.
“PJM has reformed its interconnection process, and through this
[federally-approved] process, is quickly processing [energy generation]
projects,” PJM’s spokesperson said. “Yet, Maryland itself has very few
prospective generation projects in the near-term interconnection process.”
“Maryland policymakers should analyze why and what can be done to encourage
[power plant] development,” PJM added.
A man wearing a yellow t-shirt that said 'No Eminent Domain for Corporate Gain'
listened as residents pleaded with power line developer PSEG to abandon the
Maryland Piedmont Reliability Project during a Wednesday, July 31, 2024 town
hall in Frederick, Md. (Gary Collins/FOX45 News)
As Marylanders continue to battle the possibility of eminent domain taking their
private property and the threats of increased electricity costs taking money
from their wallets, the region’s power grid operator said there is a clear
solution state leaders must immediately consider.
“[U]ltimately, Maryland needs energy infrastructure, and it needs it now,” PJM
said.
READ THE COMMENTS (6)
Follow Gary Collins on X. Do you have news tips on this story or others? Send
news tips to gmcollins@sbgtv.com.
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