More power plants urged | Maryland Gazette (HometownGlenBurnie.com)

The PJM Interconnection warned the Public Service Commission at a planning conference Thursday that to keep up with Maryland's growing demand for power, three new 600-megawatt power plants should be constructed by 2017.

So to avoid building costly plants, state officials are pushing instead for more conservation programs.

Maryland already is a net power importer, purchasing more than a quarter of its electricity from other states. The peak demand is expected to grow by 1.6 percent across the entire PJM network, which stretches from New Jersey to Maryland, in the coming year and 1.2 percent in Baltimore Gas and Electric Co.'s territory.

"In the planning stages there is insufficient generation to meet those peak loads," said Mike Kormos, PJM senior vice president of reliability.

Pepco recently announced it planned to retire two of its aging power plants, taking 800 megawatts of generation power out of the grid.

PJM holds 15 percent of its generation capacity in reserve to meet the demand of the highest consumption days, particularly during extreme heat waves. But PJM is considering upping its reserve capacity as demand is starting to exceed plans to build new plants.

The PSC's two-day planning conference this week was meant to give the state's power regulators a better idea of Maryland's future power needs. The conference followed Wednesday's power summit, convened by Gov. Martin O'Malley. Like that summit, the PSC's conference largely focused on ways to slow Maryland's power demand, teaching consumers to moderate their usage and avoid expensive peak periods during the day.

BGE officials estimated the company's power-saving programs, which allow it to shut down power-hogging appliances such as air conditioners and water heaters during peak times, could cut its peak-power demand by 1,300 megawatts. A megawatt is equal to 1 million watts, or enough energy to power 1,000 homes for a month.

BGE is expected to hit a high of 7,303 megawatts this year after setting consumption records in back-to-back summers in 2005 and 2006.

The demand-reduction programs cost two-thirds less than building a new power plant, said William Pino, BGE director of energy supply and forecasting.

BGE also is beginning a 5,000-home pilot program for its smart meters, a device that allows customers to track their power usage in real time as prices fluctuate throughout the day. The power company's peak power demand is growing by an average of 90 megawatts a year, but "aggressive" use of smart meters could cut its peak demand by even more - 140 megawatts, Mr. Pino said.

Mr. O'Malley also has set a goal to reduce the amount of energy used per person during the next eight years by 15 percent. That would save ratepayers $1.8 billion over that time frame and eliminate the need for two new power plants, according to state projections.

The greatest opportunity for energy savings in a home is in lighting, said Cheryl Harrington, associate director of the Regulatory Assistance Project in Maine, a nonprofit agency that helps states with energy-efficient planning. Half of the potential savings in the average home can be achieved by switching from incandescent to fluorescent light bulbs, she said. More efficient water heaters and heating and cooling systems also can lower monthly bills.

While state officials believe reducing demand shows the best potential for easing customers' bills right now, they also are considering ways to encourage energy conservation on the part of power providers. The PSC has approved decoupling of rates for power distributors such as BGE, which would allow power companies to adjust their distribution rates to cover their fixed costs as customers use less power.

With rates based on customers' usage, utilities have had no incentive to help customers use less power. However, the Office of the People's Counsel, which represents ratepayers, raised concerns with the scheme, saying it amounts to guaranteed profits.

"There is no silver bullet; no single answer to roll back the clock on our utility bills," said Malcolm Woolf, energy administrator .