Inaction on local transmission project regulatory gap harms Maryland electric customers, OPC tells federal regulators
BALTIMORE – Federal regulators’ continued failure to close a gap in regulatory oversight for local electric transmission projects leaves Maryland customers exposed to hundreds of millions of dollars in potentially unwarranted transmission costs, the Office of People’s Counsel said in a filing with the Federal Energy Regulatory Commission (FERC) on Friday.
“While federal regulators leave unaddressed complaints challenging the lawfulness of a massive regulatory loophole, utilities can make profit-serving decisions to build ‘local’ transmission projects that cost their customers tens or hundreds of millions of dollars without effective regulatory review,” said Maryland People’s Counsel David S. Lapp. “These projects face little scrutiny beyond siting review at the State level, and they evade effective federal cost oversight and competitive procurement requirements that could lower costs.”
OPC’s filing addresses the rules of the regional transmission organization, PJM, which operates the regional power market and conducts transmission planning for Maryland’s electric utilities. PJM’s rules enable electric utilities to evade effective oversight by deeming projects as “local” or “supplemental” projects, OPC said.
OPC’s filing points out that Maryland has been or will be responsible for $3.663 billion in estimated capital expenditures on local projects from 2010 to 2031. These costs—plus the utilities’ return, including profits—are paid by the customers of the local utility building the project.
As an example, OPC’s filing discusses transmission projects intended to serve real estate development at Port Covington in Baltimore. Baltimore Gas and Electric initially estimated the project costs at $105 million but then increased the costs nearly fourfold to $407.25 million, even though the prime developer of the real estate project driving the increased energy demand pulled out of the real estate project, raising questions about the project need. More recently, in a filing with the Maryland Public Service Commission (PSC), BGE noted a further increase of more than $100 million, to $520 million; yet that increase has not been the subject of any PJM presentations or discussions, and it is unclear whether BGE has notified PJM of the increase.
In PJM’s transmission planning process, BGE and its owner, Exelon, refused to answer questions about the Port Covington project cost increases or efforts to control costs, asserting that cost issues are not part of PJM’s process, OPC’s filing explains. (OPC requested in February that the PSC open an investigation into the project; the PSC has not acted on OPC’s request.)
OPC’s filing also highlights similar responses refusing its requests for project cost and planning information by Maryland utility Potomac Edison, owned by FirstEnergy, which is building local transmission projects to support data centers in its Maryland service territory.
OPC’s comments support a motion by OPC’s Ohio counterpart, the Office of the Ohio Consumers’ Counsel, asking FERC to take action on its complaint, filed in 2023. OPC is participating in the case—Maryland and Ohio are both part of the PJM region and subject to the same flawed rules—and filed in support of the initial Ohio complaint in 2023. In 2024, OPC also filed a separate complaint jointly with a broad coalition that challenged the lack of regulatory oversight nationally of local transmission projects. FERC has taken no action on the complaint since. The Ohio advocate and OPC’s filings each explain how costs for local projects have spiraled upward since the Ohio complaint was filed in 2023. OPC also joined in other comments supporting Ohio’s motion with other state and federal consumer organizations.
“It’s time for FERC to act on these outstanding complaints,” Lapp said. “As FERC sits on our complaints, transmission costs for customers continue to rise.”
For more on OPC’s advocacy to address costs regulated at the federal level, visit OPC’s website.
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers in 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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