The Federal Energy Regulatory Commission on Monday rejected a national energy company’s bid to raise electric rates in Baltimore to pay for maintenance of outgoing power plants.
Talen Energy Corp., owner of the Brandon Shores and HA Wagner coal- and oil-fired plants in Anne Arundel County, will enter settlement talks with the Maryland People’s Counsel’s Office ahead of a possible “evidence-type hearing.” trial” in front of an administrative law judge. The company had been seeking to pass along more than $774 million in costs to clients, according to the People’s Attorney’s Office.
“FERC’s decision justifies our concerns that Talen failed to demonstrate that its proposal is fair to customers and that a thorough analysis is needed before imposing these extraordinary costs on customers,” said Maryland People’s Attorney David S. . “We look forward to demonstrating the unreasonableness of Talen’s proposed cost recovery as the case progresses.”
In April 2023, Talen submitted a request to close the power plants by mid-2025. In response, regional power grid operator PJM Interconnection determined that the plants should remain open until at least 2028 to ensure a reliable supply of electricity throughout Maryland.
Talen, based in Houston, then proposed keeping the plants open, transferring significant costs to customers. The Office of the People’s Assessor said in an April federal filing that the proposed cost recovery plan would amount to about $215 million per year, with about three-quarters of that amount falling on BGE customers and the rest being borne by BGE. paid for by customers of Pepco, the southern Maryland company. Electric Cooperative and others.
The payment agreement could have added about $5 a month for the time it takes PJM to replace the power, according to the Office of the Town Assessor, an independent state agency that represents residential consumers of electricity, natural gas, telecommunications and Maryland private services. water and certain transportation matters before the Public Service Commission, federal regulatory agencies and the courts.
“Talen, Brandon Shores and Wagner should not be asked to (manage the plants) without fully recovering all costs, investments necessary to maintain the plants and a fair return on capital,” Talen said in his proposal.
In the ruling, the regulatory commission said the corporation’s proposed rates “may be unfair, unreasonable, unduly discriminatory or preferential, or otherwise unlawful,” as a potential violation of the Federal Power Act. The regulatory commission also said Talen calculated the proposed rates by inflating the market value of the plants and including taxes and expenses.
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“We find that the Requesters’ submissions raise issues of material fact that cannot be resolved based on the record before us and that are more appropriately addressed in the hearing and conciliation judge proceedings ordered,” FERC wrote in its order on Monday.
PJM says it expects to complete a nearly $800 million transmission upgrade by 2028 to offset the closures of the two plants, which generate about 2,000 megawatts, a substantial portion of the state’s electric power.
In January 2022, the Maryland Public Utilities Commission, which opposed Talen in its own presentation to the commission, preliminarily approved plans to transition the plants from burning coal to burning primarily oil, although the Environmentalists expressed concern about the switch from one fossil fuel to another.
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