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FOR IMMEDIATE RELEASE
January 21, 2022 |
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OPC Calls on Maryland Public Service Commission to Address Exelon’s Regional Market Power
BALTIMORE – Without regulatory action, Exelon Corporation could use its regional market power to the detriment of Maryland customers, the Office of People’s Counsel told the Maryland Public Service Commission in a filing today. OPC asked the Commission to hold a hearing on whether to extend conditions designed to protect customers that were part of its 2012 approval of the merger of Exelon Corporation and Constellation Energy Group, Inc.
“Key protections for Maryland customers that the Commission imposed in its 2012 merger order are expiring,” said People’s Counsel David S. Lapp. “But the market conditions that make customers vulnerable to Exelon’s exercise of market still exist today. The Commission must take action now to ensure key protections remain in place unless and until market conditions change.”
The most significant issue the Commission should address is Exelon’s obligation to remain in the regional power pool, known as PJM. PJM is the regional transmission operator whose mission is to ensure the regional electric power system is run in a competitively neutral way. Another important issue is whether certain market conduct requirements adopted as part of the Exelon-Constellation merger approval will continue after ten years. OPC’s analysis shows that the market conduct measures should remain in place as long as Exelon can exert market power and until Exelon can demonstrate that the measures are no longer necessary to protect customers.
PJM’s own Independent Market Monitor has concluded that the “most significant exercise of market power available” to Exelon is its ability to leave or threaten to leave the PJM system. Exelon is one of the largest utilities in PJM.
“The Commission should take away Exelon’s ability to leverage control over or manipulate PJM’s decision making by leaving or threatening to leave PJM,” Lapp said. “Otherwise, Maryland customers will be vulnerable to Exelon’s ability to manipulate regional markets.”
Approximately 60% of Maryland electricity customer bills are passed through PJM. While the Commission can use its authority under the Exelon-Constellation merger to require Exelon to remain in PJM and impose other conditions, the costs that flow through PJM to Maryland customers are subject to the jurisdiction of the Federal Energy Regulatory Commission.
In addition to requiring Exelon to remain in PJM, OPC is asking the Commission to determine whether extending the 2012 merger approval market conduct requirements is necessary to protect Maryland customers from significant risk of harm.
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers of electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies and the courts.
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