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O'Malley pushes PSC to seek renewables in new power generation

Gov. Martin O'Malley is pushing state energy regulators to consider renewable energy resources and to allow utilities to own plants again in their efforts to seek potential new power generation at cost-controlled prices.

To prevent potential blackouts and reduce Maryland's reliance on out-of-state electricity, the Public Service Commission last month ordered the state's utilities, including Baltimore Gas and Electric Co., to seek proposals for companies that would build natural gas plants in return for guaranteed power purchases by the utilities.

Gov. Martin O'Malley said in a letter Thursday to the Public Service Commission that limiting the solicitation to natural gas plants is "not in the public's best interest."

He asked the commission to give "full and meaningful consideration of clean, renewable energy resources for meeting Maryland's electricity needs, as well as to include the option of utility-owned generation."

O'Malley suggested that the commission either modify the current request for proposals or initiate a new process for renewable energy generation.

O'Malley focused most of his argument on including renewable energy, saying the commission needs to compare the price of natural gas to the price of green power sources, such as wind and solar.

Having utilities own and build plants would be a clear move away from deregulation, which a decade ago in Maryland separated the business of producing power from the business of delivering electricity. Maryland utilities, such as BGE, have not owned and operated power plants for many years.

Regarding the possibility of utility-owned generation, O'Malley said "having more participants in the [request for proposals] process will increase competition and could result in lower prices for Maryland ratepayers."

The PSC has statutory authority to order new generation.

Under the proposals ordered by the PSC this month, utilities would agree to buy power from successful bidders, a mechanism to ensure financing for the facilities' construction.

Constellation Energy Group, BGE's parent company, said it is still reviewing the commission's order and also will analyze the governor's proposal.

O'Malley spokeswoman Raquel Guillory said the governor is asking the PSC to "utilize all the tools in their arsenal to ensure that ratepayers receive the best deal in any new generation scenario, including utility-built generation and renewable generation."

O'Malley, who has been critical of deregulation, unsuccessfully tried to impose broader re-regulation through legislation in 2009.

In recent years, O'Malley has made renewable energy a priority. He is pursuing a plan for wind turbines off the Atlantic coast. And the governor has set ambitious green energy goals. State law requires electricity suppliers to generate 20 percent of their power from renewable sources by 2022.

"What the governor is saying is that he wants renewables to be able to compete on the same basis as natural gas," said Michael C. Powell, a Baltimore energy lawyer, whose firm, Gordon Feinblatt, represents clients who may be interested in bidding. "He wants to put both options on the table for a level playing field."

Powell predicted Friday that the Public Service Commission would most likely initiate a request-for-proposals process for developing renewable energy generation in parallel to the existing one for natural gas.

Adding the option for utility-owned generation seems less likely given the tight schedule established by the PSC, Powell said.

PSC spokeswoman Regina Davis said Friday that the commission does not comment on pending cases.

The commission will make a final decision on whether new generation is needed at a hearing scheduled for Jan. 31.

hanah.cho@baltsun.com

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