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Could state-owned plants prevent power shortages?

April 29, 2008|By BOB MAGINNIS

Now that almost everyone acknowledges that Maryland's plan to deregulate electricity didn't work, state officials are looking at how to prevent a power shortage predicted by the state's Public Service Commission.

The Associated Press last week reported that the PSC study said that if no major changes were made, the state could face rolling "brownouts" or even blackouts by 2011.

If they happen, much more than inconvenience for this region will be involved.

Last June, The Baltimore Sun reported that the National Security Agency, one of the nation's top spy organizations, had already experienced power outages in some of its buildings at Fort Meade, Md., and officials there were worried that old substations couldn't handle the power load.

In an AP interview last week, Gov. Martin O'Malley suggested that one answer might be for the state to have its own power-generation facilities.

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O'Malley cited the Baltimore Metropolitan Council's operation of a series of reservoirs to handle water needs for the city and five surrounding counties.

O'Malley also said that having the state own generators that could be turned on at hours of peak demand - when power is most expensive - could cut costs.

Some local governments already use their own generators for the process, called "peak shaving," so a coordinated effort to do that would seem to make sense.

But building large, new generating plants present another problem - no one wants to go without power, but few want to live close to a large generation plant, no matter what sort of fuel it uses.

Long-time county residents might remember the mid-1980s battle against a proposed 880-acre power-plant site in the Pinesburg area near Williamsport.

After then-Gov. Harry Hughes halted the site study in 1985, officials of Potomac Edison, which later became Allegheny Energy, agreed that there was no imminent need for a new generating facility. But they predicted there might be power shortages by 2000 if something were not done.

Of course, finding a solution, or at least planning ahead 20-some years ago would have been a lot cheaper than it will be now.

But state officials pointed out then a fact that is still true today - many citizens don't raise objections to a proposal until it's well into the planning stages.

Compounding that problem is state officials' mishandling of electricity deregulation that passed in 1999.

Lawmakers approved it, based on the idea that new suppliers would enter the market. But because rates were capped, there was no incentive for new players to come to Maryland.

By 2002 - 18 months after the legislation passed - The Washingtpon Post reported that no new competitors had entered the market.

This should have been a red flag to the Maryland General Assembly, but its members stayed in snooze mode until 2005, when the Baltimore Gas & Electric Co. announced a 72 percent rate increase.

Then lawmakers came up with the shameless tactic of blaming the Public Service Commission for not catching their mistake. Apparently it worked, because most of the geniuses who passed deregulation have been re-elected.

O'Malley was not one of them, but he does seem ready to address the problem. My suggestion to him: Check the roll call on the deregulation vote, then advise those who voted "yes" that it's time to help fix the mess that they made.

Bob Maginnis is editorial page editor of The Herald-Mail newspapers.

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