Maryland utility customers vulnerable to regulatory gap in oversight of costly transmission projects, Office of People’s Counsel tells federal regulators
BALTIMORE – Utility monopolies are spending billions of dollars on transmission projects with little or no regulatory oversight of project costs or evaluation of less costly alternatives, the Office of People’s Counsel told the Federal Energy Regulatory Commission last week.
OPC’s filings address the rules of the regional transmission organization, PJM, which operates the regional power market and conducts transmission planning for Maryland’s electric utilities. Those rules enable electric utilities—which have substantial influence over PJM’s policies—to evade effective oversight by deeming projects as “local” or “supplementary” projects, OPC said.
“PJM’s regulatory loophole enables utilities to make profit-serving decisions to build ‘local’ transmission projects that cost their customers tens or hundreds of millions of dollars without effective regulatory review,” Maryland People’s Counsel David S. Lapp said. “Utilities are spending on these local projects with little assessment of project need, while evading both requirements for competitive procurement that would lower customers’ costs as well as review by Maryland regulators for cost-effectiveness.”
OPC’s comments support a FERC complaint filed by OPC’s Ohio counterpart, the Office of the Ohio Consumers’ Counsel, which explained that Ohio’s electric utilities have added more than $6 billion in investments in local projects since 2017 that largely escape regulatory review. OPC submitted its own comments and also joint comments together with other state and federal organizations.
Maryland electric utility customers suffer from the same regulatory gap that prompted the Ohio complaint—neither federal nor state regulators review the local projects constructed in Maryland for cost-effectiveness prior to construction. From 2017 to 2022, Maryland’s utilities have spent nearly a billion dollars on local projects, comprising nearly 90 percent of total dollars spent on Maryland transmission infrastructure.
The 2017-2022 transmission project spending does not include PJM’s nearly $800 million of transmission projects related to the June 2025 planned retirement of the Brandon Shores 1,282-megawatt coal plant located near Baltimore. PJM concluded substantial transmission enhancements are necessary to address the retirement but used its “immediate need” exemption to excuse the projects from its planning and competitive procurement processes—even though the transmission projects are not scheduled to be completed until the end of 2028.
Like “local” transmission projects, under its rules PJM assigns the construction of “immediate need” projects to local utilities, evading competition and effective regulatory oversight for cost-effectiveness. Maryland customers will bear the brunt of the nearly $800 million transmission solution to Brandon Shores, with Baltimore Gas & Electric customers alone bearing $534 million of the costs. OPC, the Maryland Public Service Commission, and other state regulators separately challenged PJM’s proposed Brandon Shores transmission solution, but FERC denied that challenge earlier this month.
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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