As energy issues take center stage in Annapolis, lawmakers are pushing to build new energy generation projects in Maryland.
Regional supply-demand issues and a coming leap in energy prices have lawmakers concerned about consumer energy costs and reliability. They’re considering measures to build new energy as they try to lower costs for Marylanders, work around regional grid issues and make the state more self-sufficient.
“All of us are concerned about the prices,” said Del. Lorig Charkoudian, a Democrat from Montgomery County. “All of us are working really hard to figure out how to alleviate the impact on ratepayers.”
Bills introduced this session would promote building more in-state energy projects, including natural gas, nuclear, renewables and battery storage. These bills come even as some experts doubt that Maryland really needs to build more energy production right now.
What’s driving this push for new in-state energy?
Incoming data centers and manufacturing have boosted demand across the multi-state regional grid. Electrification is also a factor.
The regional grid operator has warned of the possibility of a capacity shortage by the middle of next year.
Reliability issues might be a growing concern, but the more urgent issue with this supply-demand mismatch is affordability.
“Currently, there is sufficient generation and supply to keep the grid reliable, but the cost has skyrocketed,” said Abe Silverman, an assistant research scholar at Johns Hopkins University’s Ralph O’Connor Sustainable Energy Institute.
Delays in getting new energy projects up and running are contributing to this strain. A huge backlog of projects have been waiting for approval to plug into the grid, but that process has “imploded,” Silverman said.
Called the “queue,” the approval process was designed to handle hundreds of large projects like natural gas, nuclear, and oil. Thousands of smaller renewable energy projects have overwhelmed the queue recently, Silverman said, causing wait times to jump from two years up to five.
Projects have to deal with other roadblocks like siting and permitting, local opposition, and supply chain issues once they are approved. The regional grid operator is implementing reforms to deal with the queue.
On top of that, energy prices for 2025 and 2026 shot up last summer. Ratepayers wouldn’t begin to feel the impact until June.
PJM holds a “capacity auction” each year, where they pay generators in exchange for the promise that power plants will be around to produce energy when needed. In the summer of 2024, capacity prices at the auction for the entire grid went from $2.2 billion to $14.7 billion, a 800% increase.
A report from the Office of People’s Counsel, which represents Maryland’s residential ratepayers, estimates that the average residential BGE customer would see an extra $16 on their monthly electric bills because of the auction. Allegheny Power System customers (including Potomac Edison customers) will see an $18 increase, Delmarva customers will have a $4 increase, and Pepco customers will pay an extra $14 per month. The increases will hit after June 1 of this year.
“They’re making decisions that are harming our constituents, harming our ratepayers, harming our communities,” Charkoudian said. “And so again, we’re here kind of going ‘Okay, so, like, what’s within our control? What are the things we can affect even though we can’t affect, directly, these markets that are driving up prices for our consumers?’”
A spokesperson from PJM wrote that almost all of its meetings and voting are public. PJM doesn’t make a profit, he said, and its directors cannot have financial stakes in members of the organization. It has over one thousand members belonging to different sectors like generation, transmission and distribution, as well as customers and consumer advocates.
“PJM favors no fuel or technology,” he wrote. “We do not plan generation; we study projects requesting to interconnect to the grid for their impact on reliability and to make sure they can deliver electricity throughout the region. Nearly all the projects we are studying – and the 50,000 (megawatts) we have cleared to build – are renewable.”
He wrote that auction prices were high this year because of increased peak load predictions, power plant retirements, and market reforms.
What solutions to these issues are legislators considering?
At a very basic level, there are three basic ways to address these energy issues, Silverman said: generate more, import more or use less. The state could build more energy generation, build more transmission lines or work to cut back on usage.
It’s up to policymakers to decide which solutions to use and how, and a number of bills are backing option one: building new power in Maryland.
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Democratic leadership is sponsoring a legislative package that would promote building new natural gas, nuclear, and other types of “dispatchable energy.” Gov. Wes Moore’s energy bill also supports new nuclear, which would be funded by ratepayers. Charkoudian is the lead sponsor on legislation that would support building more energy storage, provide clean energy credits for nuclear, and incentivize solar. It also supports relicensing the state’s only nuclear power plant.
Meanwhile, a bill enjoying bipartisan support in the Senate would take a hard look at Maryland’s current energy policies. If it’s passed, a team of experts would have to find a way for the state to cut back on imports and increase in-state energy generation.
Maryland needs to “reverse course” on its energy policies and prioritize energy reliability and affordability, said bill sponsor Chris West, a Republican from Baltimore and Carroll counties.
“If I can get that (bill) through, I will be a happy camper,” he said.
Maryland currently imports 40% of its electricity from out of state.
“I don’t want to say that there aren’t legitimate concerns about relying on power imported from other places, but the reality is … that Maryland has long imported portions of its generation,” People’s Counsel Lapp said. “Generally, it’s ranged around 40%, but sometimes goes up and sometimes goes down.”
But it can be more cost-effective if energy doesn’t have to travel as far between where it’s produced and where it’s consumed, said Adam Dubitsky, the consulting state director for the Maryland Land & Liberty Coalition.
Existing plants in Maryland could have cut imports in half in 2023 by producing more in-state energy, Lapp said, but that would have been more expensive for them than imports.
How much more in-state energy does Maryland need?
None, at least not immediately, according to the Office of People’s Counsel.
“What we’re finding is that there is not an immediate reliability crisis to address,” Lapp said.
He said there could be reasons to build more energy in Maryland, like meeting clean energy goals, but the state isn’t seeing the same demand growth from data centers as other areas. The only similar concern in Maryland would be the coming retirement of a power plant, but PJM is building a new transmission project to make up for the loss of energy. A study from the Office of People’s Counsel found that the transmission will be enough to make up for the loss and even provide more capacity without needing to build more power in Maryland.
“Based on current forecasts, assuming there is overall enough supply to meet PJM’s demand, Maryland should be in good shape,” Lapp said. “If PJM as a region falls short, you know, Maryland could fall short. But that’s not a Maryland-specific problem.” It would be expensive and unrealistic for Maryland to build all the energy the grid is demanding, he said.
West, the sponsor of the task force bill, is worried about potential brownouts, blackouts, and expensive imports if the grid doesn’t have enough energy supply.
When asked to choose between paying for new generation in Maryland or facing blackouts and pricey imports, “I think you’d find the people of Maryland say, ‘we think we’d rather bite the bullet and generate it locally,’” West said.
Charkoudian said the idea of blackouts was “absolutely inaccurate.” Higher prices are on the horizon because of the capacity market, but not blackouts, she said.
The reality, Silverman said, is that PJM has less surplus power than it used to. There’s still enough to keep the lights on, but the safety buffer has shrunk.
“I would say we’re in the yellow zone, not the red zone,” he said.
Meanwhile, he said, consumers are in a financial crisis.
“Energy poverty is a real thing in the United States, and as we sort of balance the need to talk about climate change and … other localized environmental issues, we also need to talk about customer affordability, because that also has really profound impacts on people’s quality of life,” he said.