Federal agency should reject $780 million transmission proposal to address Maryland coal plant’s retirement, OPC protest asserts
BALTIMORE – A proposal for massive transmission projects that would cost Maryland electric customers hundreds of millions of dollars should be rejected because of numerous deficiencies that will harm customers, the Office of People’s Counsel said in a protest filed this week at the Federal Energy Regulatory Commission.
The proposal by the regional transmission organization, PJM Interconnection, LLC, seeks to address electric reliability issues raised by the upcoming retirement of the Brandon Shores coal plant near Baltimore. PJM’s proposed solution to the retirement fails to consider alternatives to the transmission buildout and avoids competitive procurements that could substantially reduce project costs, OPC’s filing explains. Under the proposal, most of the work would be performed by Exelon and its Maryland utility subsidiaries, such as Baltimore Gas & Electric, earning significant returns for Exelon investors.
“The retirement of the Brandon Shores coal plant was entirely foreseeable,” People’s Counsel David S. Lapp said. “While some transmission upgrades appear necessary, the failure to plan for that retirement is now being used as a rationale for solutions that benefit utility monopolies and unnecessarily impose high costs on the backs of captive customers. Customers deserve a full and transparent process for considering alternatives that could lower their costs while continuing to maintain transmission system reliability.”
In April, the owner of Brandon Shores, an affiliate of energy giant Talen Energy Corp., gave notice that it plans to retire the Brandon Shores plant on June 1, 2025. That notice caused PJM to conduct a reliability analysis that determined the plant—which is generally used only at peak times of electricity demand—is needed to maintain electric system reliability.
OPC’s filing points out that PJM should have proactively addressed Brandon Shores’ retirement and avoided the cost premium customers would have to pay under PJM’s high-cost transmission proposal. Well before Talen’s official notice of retirement in April, there were obvious signals that Brandon Shores would likely soon be retired, OPC pointed out, including the age of the plant, its relatively infrequent sale of energy into PJM, and the financial turbulence of Talen, which recently emerged from bankruptcy.
In addition to the numerous proposed transmission projects, PJM has asked Talen to keep Brandon Shores operating until those projects are completed—the end of 2028 at the earliest, OPC’s filing explains. That would mean Maryland customers would also be on the hook for payments to Talen to keep the plant operating after June 2025—potentially in the hundreds of millions of dollars—under the favorable regulatory treatment Talen would gain by operating after that date as a reliability plant.
Under PJM’s transmission proposal, most of the spending—over 68 percent, or $534 million—is assigned to BGE; that amount would comprise an approximate 35 percent increase over BGE’s 2021 FERC-regulated transmission investments that are used in calculating rates for Maryland customer bills. Those same customers would also pay much of the above-market costs of keeping Brandon Shores operating past its planned retirement date.
OPC’s filing notes numerous flaws in PJM’s proposal, including failures of planning, transparency, process, and consideration of competitive solutions. The filing also notes the apparent lack of effective review of the costs of the proposed projects.
OPC requests that FERC reject PJM’s filing and require PJM to make a new filing that includes a commitment by PJM to conduct a transparent and thorough review of alternatives—such as energy storage—and a process for competitive procurement for some or all of the proposed transmission buildout. OPC also asked that FERC initiate a proceeding to investigate and adopt appropriate remedies for addressing the issues raised by the Brandon Shores plant’s retirement.
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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