This week's dueling energy hearings - Gov. Martin O'Malley had a one-day summit, the Maryland Public Service Commission winds up a two-day conference today - have perhaps spawned new confusion over local energy needs. From the issuance of subpoenas examining Constellation Energy Group's relationship with Baltimore Gas and Electric to concerns over future power shortages, heads may be spinning like utility meters in July.
This much is clear: The one-two punch of BGE rate increases is not the end of upheaval for local consumers of electricity. Maryland is entering a brave new deregulated world of power, and the PSC is playing catch-up. Some important decisions are going to have to be made in the coming months.
Some fact-finding - such as the long-overdue examination of Constellation's dealings with its subsidiary - still must be performed to fully understand what's going on. But some strategies are emerging from these discussions. They include:
Changing the way BGE buys power from the wholesale market. Conducting auctions at a predetermined date for a fixed duration is fraught with peril. What's needed is a more flexible approach that reacts to market conditions - locking into long-term contracts only when appropriate.
Finding cheaper power. The Midwest has generating capacity; we have demand. What's the problem? Maryland needs high-power transmission lines to make the connection. That's bound to be controversial, but compromises will have to be made.
Lowering demand. Utilities ought to be rewarded for getting their customers to use less power at peak times. Conserving power is not only as good as encouraging new production, it's often a better overall strategy - less Earth-warming carbon in the atmosphere and fewer noxious gases in the air.
Gone is the day when Maryland utilities applied for a rate increase and the PSC merely had to examine the company's costs and its potential profit margin before issuing an order. What's required is a more dynamic approach.
Recently, for instance, officials at Constellation said they may back off plans to expand the Calvert Cliffs nuclear power plant because the Bush administration is offering to guarantee only 90 percent of debt. What if the state or federal government agreed to the extra 10 percent - but only on the condition that a portion of profits derived from the expansion be used to lower local rates?
In a deregulated marketplace, that may be the kind of quid pro quo that makes sense. And it's a reminder that Maryland needs to think outside the grid. The old way of regulating power may be less confusing, but it's also no longer available.