Maryland is challenging a Trump administration ruling that officials say could hinder the state’s efforts to expand renewable energy generation.
The Maryland Public Service Commission has asked federal regulators to reconsider a December decision that effectively raises the cost of solar, wind and other renewable energy that receives state subsidies, making it easier for fossil fuels to compete. The Federal Energy Regulatory Commission ruling applies to PJM Interconnection, the power grid that covers Maryland, 12 other states and the District of Columbia.
The ruling infringes on the state’s right to ensure it can keep the lights on under energy and environmental policies as it sees fit, said Jason Stanek, chairman of the Public Service Commission. Maryland and many other states in PJM and across the country subsidize renewable energy to help it compete with coal, gas and other fossil fuels, aiming to speed adoption of the technology and drive down greenhouse gas emissions.
Stanek said the federal commission’s decision could effectively bar solar and wind farms from participating in PJM’s regular auctions. In the auctions, power plants are paid upfront for promises to help the grid meet power needs three years in the future, and the cheapest bids win.
The federal ruling could take away much of the economic advantage renewable energy providers enjoy in those auctions because of state subsidies.
The change also could lead to higher prices in the auctions, Stanek said.
“Ultimately, ratepayers will bear that expense,” he said.
FERC officials say states still have authority over the types of power plants that are built within their borders, but that giving some types of energy generation a financial incentive in the auctions to provide power grid capacity is unfair.
“FERC is affirming our obligation to safeguard the competitiveness of the PJM capacity market,” FERC Chairman Neil Chatterjee said in announcing the ruling Dec. 19. “An important aspect of competitive markets is that they provide a level playing field for all resources, and this order ensures just that within the PJM footprint.”
The federal commission made the ruling on a 2016 complaint filed by the owners of a handful of power plants that run on fossil fuels, including the owners of several Maryland facilities: the Chalk Point and Dickerson coal, gas and oil-fired plants and the C.P. Crane plant, a shuttered coal plant that is planned to reopen powered by natural gas.
The complaint said a rule governing PJM’s capacity auctions was unfair because it created “artificial” forces suppressing prices. The fossil fuel plant owners said state subsidies allowed renewable energy facilities to offer lower prices than they otherwise would.
Regulators in New Jersey and Pennsylvania joined Maryland in filing appeals to the FERC ruling Tuesday. So did the Southern Maryland Electric Cooperative, the utility that serves residents in that part of the state, and a group of renewable energy industry organizations, including the American Wind Energy Association and the Solar Energy Industries Association.
Maryland lawmakers are set to get a briefing on the FERC ruling Thursday in Annapolis.