The tangled history of Md. electricity deregulation
In October 2001 I wrote a column that began:
MARYLAND regulators are spending millions to educate people about electricity deregulation, but a few key parts of the process haven't been covered in the government brochures."Sorry, Baltimore consumers, we blew it," is what the brochures would say if you put sodium pentothal in the Public Service Commission water coolers. "Our motto is, `You use it. Now choose it,' but in Central Maryland you may not get electricity choice for years.
Nine years later electricity shopping is finally a reality. More BGE households than ever have swtiched to a competitive supplier. What happened meanwhile? How did Maryland let BGE transfer its valuable generators to its parent, which preceded the near doubling of BGE household kilowatt prices? What has happened since then and what should be done now? Thomas Firey, a senior fellow at the Maryland Public Policy Institute, gives a good, sophisticted overview.
His ultimate prescription is closely related to regulators' recent approval for BGE to install smart meters.
Instead of pushing consumers to buy more-expensive energy-efficient appliances or building more generating plants and power lines, the easiest, lowest-cost solution to Maryland’s electricity problems would be to simply shift some of the peak demand to offpeak times when wholesale prices are lower and congestion is less.
When energy experts worry about Maryland’s future supply of electricity and its cost, their concern is about meeting peak demand. If the peaks can be moderated even slightly, that would greatly benefit Maryland consumers.
Moderating peaks is what smart, computerized meters are supposed to do.
In a history of Maryland electricity deregulation I would have mentioned the windfall profits that BGE parent Constellation Energy made from the Calvert Cliffs nuclear plant at the peak of the energy bubble. Wholesale megawatt prices were keyed to very high natural-gas prices, but (the largely depreciated) Calvert Cliffs was cranking out cheap, uranium-based power that Constellation could then sell at the inflated, going rate. Before deregulation, savings from the cheap power would have been passed to customers. But that's a quibble with Firey's account.