Maryland Resource Adequacy 

Achieving resource adequacy: PJM conducts annual capacity auctions where companies commit resources to being available to meet peak demand. In the 2024 capacity auction, PJM secured enough capacity for all of Maryland but fell short  in Baltimore Gas & Electric’s service area because it excluded Brandon Shores and Wagner power plants from the auction because they had announced plans to retire. But PJM entered into reliability must-run arrangements to keep the plants online until transmission improvements are made, ensuring reliability for the BGE area. PJM is proposing changes to its auction rules to account for reliability must-run plants in future auctions.

Resource adequacy in the near term: Maryland’s resource adequacy appears sufficient. Maryland has modest demand growth forecasts in transmission-constrained areas, transmission enhancements that have been proposed and accepted by federal regulators that will maintain reliability, and all Maryland’s coal plants have already retired or are planned for retirement (Brandon Shores).

Maryland’s status as a “net importer”: Maryland’s net importer status is an apples to oranges comparison to resource adequacy. Resource adequacy depends on the megawatts of capacity available to meet peak demand, not the overall source of the megawatt-hours consumed. Maryland and most PJM states are “net importers,” while a few states are exporters. In fact, Maryland customers benefit from being part of a diverse regional system and market and has been part of PJM for more than 60 years.

Data centers: PJM is not forecasting data center growth in Maryland that will significantly impact Maryland’s resource adequacy. Some growth is expected in the Frederick area, but that area is not affected by transmission constraints like other parts of Maryland. Moreover, financial analysts are warning that power demands will not materialize as forecasted and that there are risks of overbuilding resources.

Cost-reducing solutions: Strategies to add resources and lower costs without major risks (“no regrets”) for ratepayers include demand response programs, energy efficiency, grid-enhancing technologies, and increased deployment of distributed energy resources (DERs). Energy storage can help manage intermittent renewable generation and reduce the need for costly transmission upgrades and can come online faster than big power plants.

State requirements for new generation: State incentives or requirements are not necessary for resource adequacy. With high interest rates, supply chain issues, a short market, and forecast uncertainties, now is not a good time to have ratepayers take on risks of long-term investments. Further, high capacity market prices are signaling private generation companies to invest in new plants themselves, with private investor—not ratepayer—backing.

Avoiding utility ownership of generation: Allowing utilities to own generation could lead to higher costs for captive utility customers, as utility rates are based on “cost-plus return” regulation, unlike competitive generation options.

Competitively procured power purchase agreements: Competitive procurement would be better for customers than utility ownership, but would still place customers at great risk because it would not avoid the guesswork about future market prices.