A new power line proposal announced yesterday by a joint venture including Allegheny Energy Inc., the utility that serves Western Maryland, has the potential to moderate energy costs in the Baltimore area, though the benefits are years away.
The line, running from a substation adjacent to a coal-powered plant in West Virginia, would go to an Allegheny substation in Kemptown, in Frederick County. The 290-mile line would bring power from lower-cost coal-fired plants, providing more electricity to the eastern region. The region pays higher costs because it lacks enough plants of its own.
"It definitely would provide a pathway for less expensive power to get to Maryland," said Melissa McHenry, a spokeswoman for American Electric Power (AEP), the Ohio-based utility that operates the West Virginia plant. AEP and Allegheny are the venture partners proposing to build a major transmission line at an estimated cost of $1.8 billion. The line would also improve the reliability of the power supply in the east, she said.
It's unclear how much savings consumers could see. McHenry said yesterday that the line could decrease the charge that customers in the east pay for generating power. But the project could increase the amount utility customers in the Baltimore area pay for the transmission part of their electric bills, which accounts for about 10 percent of the total bill.
The line, which is subject to approval by regulators and by PJM Interconnection LLC, operator of the regional power grid, would not be operating before 2012, McHenry said.
One energy consultant predicted that Baltimore-area power customers, who are paying higher prices for electricity as Maryland shifts to a deregulated market, could see some cost savings as a result of the proposed line. But he cautioned that it was years away.
"In 2016, yes. Until it starts delivering power, no," said Bert Wilson, a principal at South River Consulting in Baltimore, a company that advises large power users.
Wilson said the savings would not offset other increases in costs, such as a proposed 50 percent increase in rates by Baltimore Gas and Electric Co., scheduled to take effect in June, and is being reviewed in hearings this week by Maryland regulators.
"By no means does it solve the problem," Wilson said, "but it's a step in the right direction."
Given that power demand in the region is expected to continue to outstrip supply, Wilson and others say a series of solutions is needed to address the issue. That could include building more transmission lines and constructing new plants, which takes years for regulatory review and to design and build.
In general, Wilson said, there is power available west of the Allegheny Mountains, but not enough power plants to the east, and not enough transmission capacity to get it from west to east.
"This is effectively a thruway to get power from that side to this side," Wilson explained. Once the power gets to the east, it could potentially be shared among utilities, including BGE and other companies from Virginia to New Jersey, where the capacity to generate energy is "constrained."
The line would allow "more west-to-east transfer of power," likely moderating costs in the east, agreed Allen Staggers, a spokesman for Allegheny. Staggers noted a January study by the Maryland Public Service Commission that showed that utilities in the east, including BGE and Pepco, currently pay more for power because of "significant transmission congestion" in getting power from its source to the customers.
A BGE spokesman said the utility couldn't yet gauge the impact of the project on utility bills here.
"We just became aware of the project and look forward to learning more about it in the days and weeks ahead," said Robert L. Gould, vice president for corporate communications for Constellation Energy Group, BGE's parent company.