Maryland Senate Approves Reregulation Bill as Session Deadline Looms

The Maryland Senate last week approved a bill that reverses a failed 1999 energy deregulation policy and gives state regulators the authority to order utilities to build new power plants in the state. The future of the bill is unclear, however—the state’s annual 90-day legislative session is scheduled to end on April 13.

Maryland’s Senate Bill 844 (PDF), which has the backing of Gov. Martin O’Malley, was passed on a 27–19 vote on April 1. It now goes to the House of Delegates.

The decade-old policy was passed to lower consumer power prices through market competition, but Marylanders are paying 85% more for electricity than they were before deregulation. A primary reason for this is that no new sizable generation has been built in the state since 1992, causing Maryland to meet its demand by importing over 30% of its electricity.

The state Public Service Commission (PSC) has warned that unless state utilities find ways to generate more power, Maryland will face brownouts or blackouts starting in 2011.

The approved Senate bill requires that utilities develop and submit to the PSC long-range plans regarding their electricity needs while giving the PSC the responsibility of evaluating and planning for new generation. Under the law, the PSC can order an “investor-owned” power company to acquire a certain site, build a generation facility, and procure new electricity resources.

As well as allowing the PSC to regulate power prices under cost-of-service principles, the bill also requires regulators to consider whether or not to implement a renewable standard for power sold to residential and small commercial customers.

Source: Maryland General Assembly