When Maryland deregulated its electric industry three years ago, energy companies around the country didn't stampede into the state with competitive offers to sell cheaper power.
They swamped Maryland with something else: offers to build more electric power plants.
Since 1999, seven out-of-state companies have filed applications to develop plants - an unprecedented pace for a state where one plant every couple of years had been the norm. Another eight or so companies have expressed interest in building here. Concerned about being inundated with power plants, eight state agencies last month called for a halt on multiple plant construction within the same region.
Maryland isn't alone in its apprehension. Tennessee, Virginia and Kentucky, which also have been flooded with proposals to build power plants, have recently imposed moratoriums or are considering them to buy time to examine the consequences of multiple projects.
"It is very much a new era for power plant construction," said J. Charles Fox, head of the Department of Natural Resources, one of the eight agencies charged with making recommendations to the Maryland Public Service Commission about the licensing of each power plant project.
"We've got four plants proposed for a relatively small geographic area," Fox said. "You talk to many in the industry and they say it's very likely that all four will not be built because of demand. But we don't know if these four will be built or whether tomorrow we'll get applications for another four. These are the cards we've been dealt with as a result of deregulation. We are facing a whole lot of issues we never had to deal with before."
The four proposals that spurred the call for a moratorium are for sites that would be located within an eight-mile radius in Frederick and Montgomery counties.
Two companies have filed applications. Houston-based Duke Energy North America wants to build a 640-megawatt station on 25 acres near Point of Rocks in Frederick County. Mirant Corp. of Atlanta wants to expand an existing power plant six miles away near Dickerson in Montgomery County. Hearings at the Maryland Public Service Commission are under way.
Two other companies are planning to file an application. Sempra Energy Resources Inc. of San Diego wants to build a plant at the Eastalco aluminum manufacturing facility near Buckeystown in Frederick County, and Dynegy Corp. of Houston is eyeing a field not too far away.
Residents say they're worried all four plants will be approved because old regulations aren't equipped to deal with multiple requests, said Jodye Roebuck, a Point of Rocks resident who has spent more than a year fighting the Duke plant.
Residents complain that four plants would pollute the air, drain the Potomac River, destroy agricultural land and strain a region already squeezed by encroaching development
After dozens of public hearings, countless hours on the telephone and weeks at the computer setting up a Web site and printing fliers, the state request for a moratorium is the first sign of hope Roebuck has had in her battle.
"I am very, very excited about it," Roebuck said. "Someone is finally addressing what we've been screaming about for a year. We've been saying all along that the laws and rules for licensing plants didn't change under deregulation.
"We've been saying all along that citizens are not protected under the old laws."
In the past, plants were approved based on the needs of each utility's territory. If a utility could prove that more capacity would be needed, state regulators allowed it to build a plant and then recover its investment from ratepayers.
Now, need is no longer the criterion.
Anyone can propose a plant. Plant projects can be approved as long as the effects on Maryland's natural resources are deemed reasonable. And whereas a plant built under the old regulated system produced power that was most likely used within the state, plants that will be built in Maryland now will ship that electricity across state boundaries, in most cases.
Electricity deregulation has made things considerably more complex for Fox, his colleagues at the other state agencies and the Power Plant Research Program (PPRP), which was created by the General Assembly in 1971 to examine the impact of power plants on the Chesapeake Bay and other state resources. PPRP, in concert with state agencies, makes licensing recommendations on each power project to the PSC.
Under the regulated system, the state and PPRP dealt with one plant proposal every few years. A 10-year plan outlining future electricity demand helped guide the state in its decision-making process and allowed regulators to pick and choose from sites deemed suitable for power projects.
Those guidelines no longer apply.
"The crux of the question is: How do you do this without taking into account need?" said Pete Dunbar, PPRP director. "With the old 10-year plan, we had more input and it dealt with the question of need. Now, the state cannot deny a plant based on need. If an application is made and there is no impact determined, or all impacts are under regulatory bounds, how can the state rank these proposals? How can the state show a priority or preference for one plant and not another?
"We need to establish a criteria," Dunbar said. "We don't want to turn Maryland totally over to national economic forces for siting plants."
Fox said the state agencies want to create a process that would be able to examine and establish recommendations on the cumulative effect of multiple power projects in a small region. The guidelines could rank the suitability of power projects based on a variety of factors, such as location, land use and the availability of existing natural gas and transmission lines.
For example, energy companies say an area such as Frederick County is ideal because there is a convergence of major transmission lines, natural gas lines and a water supply - the Potomac.
New permitting guidelines could determine which of the four plants would rank highest, or be best for construction.
While energy companies say they understand the need to re-evaluate, they also warn the state against overreacting.
"We believe very strongly the good this facility can bring to Maryland," said Jeremy Dreier, spokesman for Duke. "The process already in place is quite comprehensive. ... We've taken into account existing [power plants] and applied-for facilities in that area, and what impact it will have.
"It's a question of the categorical lumping of our application into potential projects that have not been filed yet, projects that are just a gleam in someone's eye," Dreier said. "It's one thing to put up a traffic light for cars already on the road. It's another thing to put up a light for cars that won't be on the road for another year."
The state says it doesn't want to be perceived as unfriendly toward future power projects, especially since Maryland still imports about 20 percent of the electricity it needs. It just requires some time to tinker with the plant approval process.
"We all agree that we have to provide electric power to the people in this state," said Fox, who added that the multi-agency task force could develop guidelines by the end of the year. "How we do that in the public interest is what we have to keep in mind."
Last week the Office of People's Counsel took the state agencies' request one step further by asking the PSC to establish a review procedure for licensing power plant construction. Approval for new plants should be given only after regulators take into account the project's effect on stability and reliability of the electric system, economics, aesthetics, historic sites, air and water pollution and waste disposal, the OPC petition stated.
For now, the PSC is dealing with the moratorium request on a case-by-case basis because the Mirant and Duke applications are pending. Hearing examiners in both cases will rule on the motion and then a record of each case will be forwarded to commissioners, who will make a determination.
What they decide could mean the difference between one power plant or all four for the people in the Frederick and Montgomery counties region.
"A lot of people say it's a small, little town and they don't want to wake up in the morning and see smokestacks," said Eric Fraley, who works at the State Line Gas and Grocery in Point of Rocks, where train commuters stop for a bite to eat.
"Despite what people think, this is not a pristine little valley," said Nancy Bodmer, a Buckeystown resident. "We've got a lot of distribution centers. We've got a lot of development. We're already pushed to the limit. I can't describe to you the heartache I would have over prime agricultural land being used for an industrial plant."