Decisions by regional grid operator, PJM, hurting Maryland electric customers

Between rising delivery and supply costs, Maryland electric utility customers are struggling. Decisions by PJM, the regional grid operator, are a significant contributor to rising bills.

Here are two key ways PJM’s decisions are uneccessarily raising rates for Maryland energy consumers.

1. A flawly auction design lead to record-breaking PJM capacity auction with a $14.7 billion price tag for ratepayers. Ratepayers will see increase supply costs on their bills in the upcoming months. The Maryland Office of the People’s Counsel is contesting the auction, calling for FERC to reduce the cost by $5 billion to address flaws in the process.The key point of contention is two power plants outside of Baltimore. The Brandon Shores and Wagner plants have planned retirements, but are continuing to run for the near term as new transmission lines are built to ensure grid stability. Because PJM failed to propely plan for the retirements, ratepayers are paying a hefty price to keep them running. To make matters worse, PJM ignored the plants in its auction, further increasing costs by upwards of $5 billion. After immense push back, PJM adjusted its rules for the next auction to account for the two plants, but the existing bad auction decision remains. Unless FERC intervenes soon, ratepayers will be stuck with $5 billion in unnecessary added costs. A recent study by Evergreen Action points to other flaws in the auction process that are costing ratepayers and how adjusting the rules could save customers hundreds of dollars every year.
2. PJM is also proposing Maryland electric customers pay for new transmission lines to bring power into Virginia. Traditionally, transmission costs are paid for by the stakeholders who are responsible for the increased transmission needs. And yet, PJM is attempting to saddle Marylanders with $800 million in new transmission costs, despite protected load stability or decreases in the BGE and PEPCO region and a 45% increase in Virginia.

Increased utility delivery rates, particularly for Exelon owned utilities in Maryland, are also contributing to high electric bills. Consumer advocates have warned that multi year ratemaking has contributed to rapidly increasing delivery costs. Electric delivery rate increases for BGE, Pepco, and Delmarva Power have outpaced inflation and other Maryland utilities in the last decade, and especially in the last 5 years.

Marylanders deserve access to safe, reliable, and affordable energy. We’re counting on our state and federal regulators and decision makers to hold the regional grid operator and our state utilities accountable to these goals.