RenewVerde Newsletter – March 2025

Maryland Legislation

Bills needed to leave their initial house in the Maryland legislature before crossover day, March 17^th this year, to have a strong chance of passing. Any bills passed from their initial house now will need to be approved by the rules committee to be heard in the opposite house.

One bill which made the deadline and is likely to pass is House Bill 829: Certificate of Public Convenience and Necessity – Overhead Transmission Lines – Grid Enhancing Technologies. The bill requires companies building transmission lines to evaluate alternatives before applying for a certificate of public convenience and necessity (CPCN). The required alternatives include battery storage, advanced conductors, alternate routings, modifications to distribution systems, and energy efficiency or demand response programs. In their evaluation, companies must consider the costs to customers and the environmental impacts of the proposed project. Here is the link to the bill, which will have its hearing in the Maryland Senate on March 26^th.

HB 829

Maryland and Virginia both import a significant portion of their electricity, and energy usage is projected to increase with data center development. Meanwhile, local electricity generation has not been keeping up, so the amount of energy imported into the states is projected to increase above the levels that the current transmission system can accommodate. If nothing is done there could be brownouts as soon as 2027 or 2028, and electricity prices are already rising due to the transmission system constraints (see PJM Capacity Auction Results below).

There is a plan to build an additional transmission line to bring more energy from Pennsylvania into Maryland and Virginia, which has made this issue a priority in the Maryland General Assembly. The proposed line would be expensive and require a large amount of land to implement, so many people want to evaluate alternatives that can support grid reliability.

See related article

Personally, I support the bill. It’s a great idea to evaluate different ways to fix a problem before jumping to a solution. However, based on what I have seen in energy storage and energy development, I am skeptical that alternatives would result in cost savings or environmental benefits in the case of this transmission line.

PJM Capacity Auction Results

Electrical capacity is the ability to generate power at the times when it is most needed, ensuring the reliability of the electric grid. While we don’t need a massive amount of electricity most days, the capacity market guarantees that enough supply is available to meet high demand during peak periods.

The capacity auction is done on the PJM system level but considers the ability to move electricity within the system which creates separate prices for each zone. Utility zones which have much more load than generation need to import power and have higher capacity prices. This is especially noticeable if the transmission infrastructure cannot transport adequate resources to the zone.

Earlier this month, PJM held a capacity auction for the upcoming year, starting this summer, and the results showed a significant increase in prices. The current capacity prices across PJM range from around $30 to $60 per MW-day, except for DP&L (DE and the eastern shore of MD) which has a considerably higher rate at $175/MW-day. Starting this summer, there will be a massive system-wide increase in price with especially high prices in Dominion (Eastern Virginia) and BGE (Central Maryland). The system wide price will be $270/MW-day, with BGE 10% higher at $305, and Dominion facing prices 60% higher at $430. Capacity is only a small part of the electricity cost, but this 5+ times increase in capacity price could cause a 20% increase in overall electricity costs.

Increasing electric demand, the retirement of power plants, and the transition to non-dispatchable resources all contribute to the increased prices. As fossil fuel plants retire, they are often not replaced with sufficient resources or are replaced with resources which are not as reliable. Coal or natural gas plants are consistently able to produce power when it is needed, as their fuel use can be modified to change production. However, a wind or solar plant will only produce power when the conditions are favorable, which may not be at the times of peak demand. Energy storage technologies, like batteries, are emerging as a solution to address reliability issues. These systems enable renewable plants to control the timing of their power output and allow their production to match demand, which is one reason why RenewVerde designs solar projects with on-site energy storage.

Report from Maryland Office of the People’s Council