posted on Thursday, January 17, 2008 9:04 AM by Tracy Davis

Maryland Energy Administration Calls for Efficiency and More Local Generation

The Maryland Energy Administration (MEA) released its Strategic Electricity Plan on January 14 in an effort to help customers lower their energy bills.  The plan, focused on conservation, efficiency and local new generation, also came in response to Maryland Governor Martin O'Malley's recent warning that the state could face serious power shortages in the near future.

The plan aims to reduce both electricity consumption and peak demand by 15% by the year 2015 and require the state's utilities to implement performance-based programs to help meet these goals.  The MEA predicts that if these goals are met, electricity consumption in the state would fall by 25 billion kilowatt-hours and consumer charges fall by over $2 billion in 2015 and by over $4 billion in 2020.

The plan comprises four central elements.  First, financing would come from a Strategic Energy Investment Fund of revenues earned from the state's sale of carbon allowances as part of Maryland's participation in the Regional Greenhouse Gas Initiative (RGGI), a 10-state initiative that aims to reduce greenhouse gases.  Second, the plan would implement energy efficiency programs, including incentives and rebates for consumers to purchase efficient appliances and have home energy audits, as well as installing interruptible load (cycling) devices on their air conditioners.  Third, the plan calls for increased investment in new generation within the state, particularly investment in sources of renewable energy, including by improving grant programs for the development of solar and geothermal energy, encouraging long-term contracts for new generation, and evaluating the need to require utilities to build or purchase new generating capacity to meet peak summertime demand.  Finally, the MEA asks for additional resources to help it produce biennial state energy plans, encourage regional transmission planning, and stimulate clean energy within Maryland.

Maryland retail customers have in recent years faced significant increases in their electric bills, following the expiration of retail rate freezes on the state's utilities.  Moreover, Governor O'Malley has predicted that by 2011 the state will face electricity shortages during peak periods.